When it comes to bookkeeping, it’s a good idea to go back to basics. We don’t mean pull out all the old ledgers and quill; we just mean that the battle of good bookkeeping can sometimes leave you in such a state that you don’t know your petty cash from your Schedule C.
Keeping it simple and starting from the end helps to get your accounts organised in no time. For instance, define categories for your expenses by assessing which tax return you need to file. When filing a Schedule C, make a note of the categories which relate to your company and ensure these are listed in your bookkeeping system.
Don’t categorise till the cows come home. For accountants, going into minute detail and breaking everything down into smaller categories is second nature, but when it comes to basic bookkeeping, try to keep it simple. If you’re listing kitchen supplies, you don’t need to break it down into tea, coffee, sugar, milk, napkins and dishcloths, for example; just total them up under a succinct heading like ‘kitchen supplies’.
Consistency is key to good financial accounting and successful company audits. Carefully managing all your bank statements, documents and last year’s tax return financials will invariably help to keep you in good control of your business’s books year after year.