If you're like me, you love accounting. It's so fascinating and
such an ingenious system. Don't you just think that Double Entry
Accounting is the most beautiful creation of all humankind?
Okay, let's get real. You probably think accounting is boring
and best left to pencil pushing geeks (like me!). I
mean...BOOORRRRING! Total Snooze-fest!
Well, my friend, I'm about to introduce you to Real World
Accounting for Regular People. But, be careful, it just may
change the way you look at accounting FOREVER! In fact, one of
my clients looked up from a spreadsheet one day and said, "Wow,
I never knew accounting could be FUN!" You just might have the
same experience.
For starters, a lot of people think accounting is about math,
which is an immediate turnoff. Although accounting does include
math, it's more like a foreign language. All you need to do is
learn the parts of that language that actually apply to you.
Think about visiting a foreign country. You don't need to be
fluent in the entire language. You just need to know the
important things like what to order (or not order) in a
restaurant, how to get directions, and how ask where the
bathroom is. It's the same thing with accounting. You need to
know what you need to know and the rest is unimportant. I mean,
do you really need to know about corporate accounting practices
or off shore financial transactions. Probably not.
So, how do you figure out what you need to know when you don't
even know where to begin? Follow me and I'll show you!
The first thing you need to know is this. You must, must, must
keep your personal finances and your business finances separate.
Using your personal checkbook for all your transactions is a bad
way to go. Here's why:
a¢ The Internal Revenue Service wants to know that you have a
very clear distinction between your personal affairs and your
business affairs. They want details. If you try to pass off
personal expenses as business expenses, you're violating tax
laws. They don't like that.
a¢ If you ever plan to borrow money for your business or get
credit from your vendors, your lender or vendor will want to see
detailed records of your business performance. Handing them your
checkbook register is not going to make them want to give you
money or sell to you on credit.
a¢ You need to know how your company is performing at all times
so you can plan ahead, make adjustments in your operations, and
make informed decisions.
a¢ The more accurate your records, the more accurate your tax
return. It prevents you from missing deductions.
a¢ It's the only way you'll know whether your business is making
money or if you're just kidding yourself.
So, if you don't have a separate checking account for your
business, go get one. It's easy and inexpensive and it will give
you clarity on how your business is really doing.
The next step is your accounting system. Now, when I say
"accounting system" I'm talking about an organized way of
keeping track of your records. It can be computerized or it can
be the old fashioned pencil and paper route. The important thing
is that a) you have one and b) you use it.
Finding a System That Works For You
Your record keeping system needs to be designed so that it works
for you. It should:
a¢ Be simple to understand a¢ Be flexible and adaptable to
changing needs a¢ Be inexpensive to develop and maintain a¢
Require little time to maintain a¢ Be handy and convenient to use
If you use a computerized accounting software package like
QuickBooks, all those qualifications are met. I generally
recommend QuickBooks to my clients because it's easy to use and
you can also find local support for set up and troubleshooting.
I don't whole heartedly recommend QuickBooks because I think
parent company Intuit is losing touch with its core customer
(we, the small business owners of the United States of America).
There's too much nickel and dime-ing and poor support. But, at
this point, it's still the most widely used system and certainly
meets the needs of most small businesses as far as what it can
do.
I do recommend that you get professional help in setting up your
accounting system if you don't have an accounting background.
It's a case of Garbage In Garbage Out. A well set up system will
give you the best information with the least trouble. It's less
expensive to have it set up right to begin with than it is to
have it cleaned up later.
Whatever record keeping solution you choose for your business,
the key to success is actually using it on a very regular basis.
Otherwise, your business struggles and you're in constant danger
of sliding into the Cash Flow Swamp
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why doesn’t the federal gov make small business owners who owe $200,000.00 + to irs pay?
Sole Propraitor of a small business to not have to pay their taxes, they do not have to claim outside monies received, nor claim or paytaxes on monies taken from business account and used for personal bills, child support etc.Even when proved said propriator is defrauding the irs nothing happens except more money is attached to his irs bill. No Garnishing , No Jail , Nothing
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You are incorrect. Everyone pays taxes.
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Small business owners account for 80% of all private sector jobs and 70% of all jobs now being created…?
why are they not invited to the jobs summit? Why are SEIU, UAW and teacher’s unions attending when they create no jobs but those who do are not being included in a discussion on solutions?
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Because the jobs summit is not really about creating new jobs, its about political posturing and rhetoric.
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What is the best way or method to setup small business accounting so it makes sense?
I have a small business that has been operating for a few years, but the accounting has been a nightmare partly because we never took the time to set it up right. We use Quickbooks Premiere to cut invoices, but that’s just it, we dont use it to its full potential. My question is, what accounting methods are some of you small business owners (or cpa’s) using? I am thinking of setting up a entirely new checking account just for monthly bills. Will this help with the confusion? I’m just tired of circulating money to buy more inventory and pay bills and not having the money go towards profits. If anyone can point me to the right direction or offer some advice, I would REALLY appreciate it.
Hobby toy distribution to retailers and direct sales to consumers (online).
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what kind of business, service or merchandising??
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Outsourcing Small Business Accounting – Who Do I Talk To?
I’m a small business owner getting things off the ground and don’t have time to play accountant all day to get the records straight. As a one-man operation at the moment, I’d like to find an accounting firm or accountant to whom I can simply give access to the bank account and have them handle all invoicing/accounts receivable, and then when I make a deposit, just let them know, and they’ll see it on the online bank statement. I’d also like them to be able to track past-due payments and add interest appropriately. The point is to NOT have to send them paperwork, but to be able to pick up the phone and say, “hey invoice client X for 2500 bucks, payable 30 days, 4.5% interest for late payments”.
What kind of accountant do I need to find or talk to? A CPA, an accounting firm, what? And what do these guys typically charge?
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this might be more than a CPA or firm might want to take on but you could try getting some referrals from sba.gov or CPA professional associations.
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Small Business Owners: Would you use my services?
I am considering starting a services business to help small businesses in my area. I am an experianced staff accountant and have a great deal of background as an analyst for a large corporation. I’ve learned a lot along the way about helping to maximize cash flow and profitability using tools and metrics that most small business just don’t have. A lot of small businesses simply don’t want to pay a bookkeeping service or for consulting concerning the nature of their businesses, but I think that;s a mistake. Given the lack of actual business and accounting experience most SB owners have. The question is, could you be convinced as a small business owner to use my services on a consulting or an ongoing basis, if I can make the case that I can help you make your business grow and thrive? Honest answers only please.
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It is not the people here on Yahoo you should be asking, but the owners of the buisinesses you want to have as clients. i think you’d be better off doing some old fashioned marketing the old small town way.
Call around, or just walk around, and contact some business owners of the type of businesses you are thinking of as clients. Buy them coffee or whatever. Don’t try to sell them anything. Just tell them about yourself and the type of business you are considering. Ask them how they do their bookkeeping and accounting, and what is good about it, and what they wish would be better about what they do now.
this will do several things, it will introduce you to them when you are not trying to sell them on something. You will get a better picture of the local businessmen and what they see as their needs. It will give you ideas about how to approach them, maybe set up bundles of services differently that helps them with what you needs, while you get a reasonable fee for.
Plus, you’ll have a good idea how to approach them later to sell them on your services.
“John, the things you told me about sounded exactly right, so I set this up. I’d like to show it to you, can I?”
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What is the purpose and usefulness of accounting and finance professional bodies to small business owners?
Hi, I’ve been looking for an answer to this question for quite some time.
I’d appreciate any help!
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Accounting professionals can help small business owners to set up accounting systems that can help make their financial information more organized and readable by outside entities. This can be useful if a small business owner needs to create financial statements to get a loan at a bank. Accounting professionals can also help small business owners complete their tax returns.
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