You decided to start your own business. Congratulations! That’s a big step! 😁
You got a lot on your plate rights now, from deciding what you will charge customers, figuring out where to market them, getting your social media pages on point, and keeping track of your expenses. The most important one, as a Bookkeeper, is always tracking your business transactions.
Why?
The revenue and expenses tell you a story, we just need to learn to read it.
Business run with 2 types of accounting. Cash basis and accrual basis. You will be running your business as a cash basis, which translates to recording income and expenses when you receive the cash. Keep it simple. Accrual is a different and I will explain that in a different post. Just remember you are a cash basis. Your tax man will ask if you are cash or accrual, just say cash.
When you start your business you really only have your revenue (sales) and expenses. I recommend you keep everything as simple as possible and increase details once you acknowledge what you want to track. Treat all sales as one and track expenses in a few basic categories (I will give you those later). For example, record income for all sales (invoice total) the first years (this way you can compare with last year’s sales) and let’s say you notice that you’re spending a lot on shipping and want to track of you’re charging enough in shipping. Simple fix, we add a new sales category labeled shipping and now you can easily track revenue made from your product/service and what revenue made from shipping.
Remember to KISS – Keep it Super Simple!
Check back soon and I will add a starter spreadsheet to help track your income and expenses.