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Bookkeeping for the computer dummy


One of the things about running a business that many people find hard to do is bookkeeping. The main reason that they find this process so hard is that they are looking into more than they should be, which means they are making it seem harder than it actually is. The best thing about bookkeeping is that if you choose the right software and follow a few simple steps you can handle the bookkeeping of your company like a pro. Basically what this means is that if you know a few simple things about computers and bookkeeping then there is no need to hire an accountant to do the work for you.

Difficulty rating: Easy

Step one:
Look at bank accounts for checking and saving. While bank accounts are a great way to spend money you might want to consider shopping around for saving money. Savings accounts do not pay as much interest as mutual funds or CD's. If you own a business you already know that maintaining a checking account is going to cost you money every year, but you can look into the different types of accounts to see how you can get the most benefits for your business for the least price. Look into using a credit union or a money market account for your business, they offer the same things that bank accounts do, but usually at a better price. You also want to make sure that the bank offers online banking, which is quickly becoming very popular.

Step two:
Create the files that you need, you can create the files on the computer and use a scanner to help put information into the files or you can create a file system by hand to keep in a file cabinet. If you are going to be dealing with a lot of paper then it is best to create manual files that you will store in a file cabinet. Although this sounds really simple and it actually is many people do not do it because they overlook it or they put everything into one huge file. This is great if you only have a few items, such as pay stubs, but when you are organizing your tax records for a business you need to have multiple files to store all of your paperwork. If you itemize your deductions you should have a separate file for each deduction. You should also have a separate file for your business expenses, such as utilities, payroll, etc. Keep it all in one spot that is easy to access, such as in a filing cabinet or in accordion files.

Step three:
Now that you have created all the files that you are going to need you are going to want to put the file system to use. One thing you want to avoid is to put everything off until the end of the business year. One thing that is important when doing your accounting is to make sure that everything balances every month if possible. If you can't do it every month then you should at least do it every other month. And by having the file system in place you can easily access your bank statements, expense receipts, income receipts, etc.

Step four:
The next thing that you are going to need to do is to choose accounting software, such as QuickBooks or something similar. Or you can create your own spreadsheets using Excel, this is actually pretty basic.

Step five:
Once you have chosen the accounting software or you have created the accounting spreadsheets you are going to want to input the expenses and income that you have incurred each month in the proper categories. You are also going to want to make sure that your bank statement reconciles, and you are going to want to make sure that everything balances. One of the best things about using accounting software is that once you input the information everything else is done for you. You can input all invoices that you have obtained, and then mark them as paid once you pay them, etc.

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