Setting Up a System – Mapping Out Your Accounting Processes You can start to develop your regular accounting procedures by separating your tasks by expected frequency: daily, weekly, monthly, quarterly, or yearly. General accounting chores will fall into each category, but tax- related tasks typically come up no more than monthly. Every business will have … Read more
Setting Up a System – Software Makes It Simpler The easiest way to get your bookkeeping done is to have someone else do it. That’s not always practical (especially from a cash-flow perspective) and not always a good idea for someone trying to get a handle on his business finances. FACT Simply using a computer … Read more
Setting Up a System – Get (and Stay) Organized By now you have probably realized that accounting involves dozens of forms, hundreds of other pieces of paper, and thousands upon thousands of numbers. Keeping track of all of that information can be tricky. Having a system in place that tells you how to fill out … Read more
Keeping Track of Transactions – The Accounting Cycle You now know about the bulk of what goes into the accounting cycle (the process that starts with a transaction and ends with financial statements). In fact, the entire accounting cycle can be summed up in eight basic steps. Write up transactions in the daily journals. Post … Read more
Keeping Track of Transactions – Checking It Twice With all those numbers floating around, mistakes are inevitable. One way to catch mistakes (though this is by no means foolproof) is to prepare a report called a trial balance. A trial balance is basically a listing of every account and its balance, with debit balances on … Read more
Keeping Track of Transactions – It’s All in the Posting The journals are where all the daily bookkeeping activities take place. Peri- odically, that information is transferred to the ledger to update each account. That transfer is called posting, and it’s a critical part of the full accounting process. With computerized systems, the posting process … Read more
Keeping Track of Transactions – The Daily Journals When accounting was strictly a pencil-and-paper gig, journals were books containing pages and pages of transactions. Because that was the place where all transactions were first recorded, journals are called the books of original entry. Now, most journal work is done using a computer, making the old … Read more
Keeping Track of Transactions – Meet the General Ledger The general ledger is like a file cabinet for all your accounts. Each account gets its own page, and every entry that affects that account is recorded there. In that way, the general ledger acts as a summary of your journals, which are books where all … Read more
Keeping Track of Transactions – Setting Up Your Accounts Every accounting system needs accounts, and every account will fit into one of the standard account categories (such as assets or revenues). When you start out in business, it can be difficult to anticipate every single account you are ever going to need. Instead of trying … Read more
Keeping Track of Transactions – When to Record Transactions In accounting, as in most other things, timing is everything. That applies to transactions themselves, in two different ways. The first involves the day the transaction actually took place (for example, you buy a box of copy paper and tell the store to bill your company). … Read more
