Q&A of the Week June 21, 2023

Question

I have a small business and want to do my own bookkeeping. What steps do I need to take to get started?

Answer

If you are managing the bookkeeping for your small business, here are six things you will want to do:

1. Learn about the five bookkeeping accounts: Assets, Liabilities, Revenue/Income, Expenses, and Equity.

2. Understand the difference between debits and credits.

3. Set up a chart of accounts and become familiar with it.

4. Record financial transactions, including creating and preparing invoices.

5. When you receive monthly bank statements, use them to reconcile your accounts.

6. Close each month and run three financial statements: balance sheet, income statement, and cash-flow statement.

Blog