How To Do Bookkeeping For Small Businesses

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How To Do Bookkeeping For Small Businesses – Auditing your small business accounting is one of the most important things you can do as a small business owner. We’ll cover everything you need to know to get started with your Excel accounting.

One of the most important aspects of small business accounting is managing current finances. This can range from tracking net income and expenses to bank reconciliation and everything in between. A good accounting system can help you accurately record and track all of these business transactions.

How To Do Bookkeeping For Small Businesses

Accounting, by definition, refers to the process of recording and classifying all of your company’s financial transactions. Bookkeeping allows you to properly organize all your income and expenses, including information about invoices. This includes customer name, supplier name, issue date, due date, amount, debtors, creditors, etc.

Bookkeeping Spreadsheet Example For Small Business

Ultimately, good business accounting can give you a clear picture of your main sources of income and expenses. Not only is this important for controlling cash flow, but you can also use the information to prepare more comprehensive financial statements, such as a balance sheet, income statement, and statement of cash flows.

While some large companies rely on premium accounting software like QuickBooks, if you run a small business or startup, consider using Microsoft Excel for your accounting needs. The online version of Excel is completely free, which can help you save on business costs.

To help you get started, we’ve put together this excel accounting guide, complete with a customizable excel accounting template you can use for your small business.

Microsoft Excel has been around since 19852. As the most widely used spreadsheet software1, it is highly customizable and accessible. You probably already have it on your computer. And if not, you can use the online version for free or download the offline version for a small fee.

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Either way, Excel is useful for a wide variety of applications, including basic bookkeeping and business accounting. Due to its widespread popularity, there are several Excel tutorials available online that you and your staff can use to master accounting functions.

However, Microsoft Excel can’t do everything; It has some limitations. For example, it doesn’t have the ability to automatically import bank transactions into your books. This is where more specialized applications like QuickBooks and Xero have an advantage. Here’s a look at what you can and can’t do with Excel accounting:

So while Microsoft Excel is useful for accounting, you still have some work to do to make sure all the data you enter is correct. You must also perform a manual bank reconciliation and generate financial statements manually.

, it’s not the only one available. Google Sheets is a good alternative, but you can also use WPS Sheets, Apple Numbers, Quip, and even OpenOffice if you prefer open source software. But remember, OpenOffice is being discontinued, so it doesn’t offer much support and updates.

Chart Of Accounts For Small Business Template

For the sake of this guide, we’ll only use Excel accounting, which works almost the same as Google Sheets accounting.

When it comes to bookkeeping, there are two types of accounting systems: single entry and double entry. Double entry is mainly used by large companies. It is based on a two-way accounting system where each transaction affects two different accounts at least equally. One account is debited and the other credited.

Suppose you sell $10,000 worth of inventory for cash. This means you lost $10,000 in inventory, but received a cash sale of the same amount. So you record a transaction twice.

Single-entry accounting is based on single-entry accounting, which means you only record each transaction once. Think of it like a jackpot. Many small business owners use this accounting system because of its simplicity. Typically, you would classify each transaction as income/income (entering the business) or expense/loss (leaving the business).

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Therefore, if you make a $10,000 sale, simply record it as $10,000 in revenue. Money comes into the business. And if you pay $900 in utility bills, record that as a $900 expense because that’s the amount that comes out of the business.

After entering all the transactions for a certain period of time (usually a month, but it could also be a quarter or a year), you use it to create an income statement. An income statement, also known as an income statement, typically shows your company’s realized profits or losses for a specific period of time. The profit or loss is what you transfer to the balance sheet.

That’s why your business accounting system should start by recording revenue and expense transactions in an Excel spreadsheet. From that spreadsheet you can generate an income statement, which you can use to create a balance sheet.

One-off accounting is not only simple, but also takes less time and minimizes the chance of errors. These are benefits that any small business accounting system can take advantage of. But if your business is growing to the point that you think double-entry bookkeeping makes more sense, you may want to consider moving from Excel accounting to using specialized accounting software such as Xero and QuickBooks.

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If you have enough experience with Microsoft Excel, you can create an accounting spreadsheet from scratch. But if you’re just getting to know the program, consider using a ready-made Excel accounting template.

There are several websites, including Office Templates, that offer downloadable spreadsheets for income statements, expense reports, and other financial reports. However, for best results, you’ll want to choose accounting templates designed specifically for small business owners. This essentially allows you to capture all your transactions in one spreadsheet template instead of splitting them up into three or more different spreadsheets.

For example, while Office templates have one spreadsheet for income and another for expenses, it doesn’t have one spreadsheet that captures both at the same time. Ideally, business owners need a spreadsheet where they can record income and expenses and also generate an income report.

This free excel accounting template does all of this and provides a simple yet effective accounting system for you to implement in your small business. Download it now and try it.

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The spreadsheet template divides your accounting system into three parts. Each part is a worksheet in itself. Here’s what you need to know about the sections of our free excel accounting template:

If you’ve already downloaded the Excel accounting template, you can customize it for your small business. We’ll walk you through the steps needed to customize and use it to keep your company’s books.

The first worksheet of the template is called “Chart of Accounts”. As mentioned earlier, this is where all of your transaction categories go. In other words, this account lists your income, expenses, and selling expenses.

These items vary from company to company. For example, a company that takes out a business loan incurs interest costs. On the other hand, a company with no debt has no interest to pay. You therefore do not expect interest costs to be incurred.

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For this section, enter all categories that are relevant to your business. All you need to do is make a list of all your company’s sources of income, sales costs and expenses.

Keep in mind that your chart of accounts will not look exactly like the one above because different companies have different types of transactions. So feel free to add or remove accounts as needed. Basically, this sheet serves as a point of reference to remind you how to categorize your different trades.

The second worksheet of our free downloadable excel accounting template contains your business transactions. Here you record the details of each transaction, including the date, description, amount, category and type. Make sure that the category and type of each transaction match the category and type in the accounts table.

By default – if you use an Excel accounting template – the income statement automatically takes the data from the transaction sheet and uses it to generate your income statement for the period.

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Remember that if you add or remove an account from the general ledger, you must do the same for the transactions and the income statement. For example, if you no longer use SEO or other marketing techniques, make sure you remove “advertising” from your chart of accounts, then remove “SEO” from transactions, and finally remove “SEO” from your income statement. This is an expense that you no longer track, so it should not appear on your financial statements.

Similarly, if you enter a new account, you must add it to your Accounts, Transactions, and Income Statements. For example, suppose you are going to spend less money. To properly record this new business expense, you’ll need to add it to your “chart of accounts,” then add it to “transactions” as an expense, and finally add petty cash to the business expense list on your income statement.

One thing to remember is that you need it too

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