A Simple Bookkeeping System For Your Small Business

Small business owners need a simple bookkeeping- Rent
method. The system described here uses single entry- Purchases of items for resale (i.e., inventory)
bookkeeping, not double entry bookkeeping that is- Supplies
taught to accountants. Record keeping can be done- Taxes
quite simply on paper or in a spreadsheet program on- Travel and Meals
a computer.- Utilities and
1. Divide a sheet of paper into columns, buy columnar- Wages
sheets from an office supply store, use graph paperYou could also include columns for purchases of
or create a spreadsheet on the computer. Label theinventory for resale and mileage if applicable to your
columns Date, Check Number, Description and Incomebusiness.
and leave several columns for expenses.3. Record every transaction whether from your
2. Label each page with the current month. If using achecking account, credit card or cash. At the end of
spreadsheet, use a different tab for each month.every month, total the Income and Expense columns.
Record income in one column and expenses in severalThis monthly spreadsheet monitors the business
additional columns.performance every month. If you total all the expense
To make tax preparation simpler, use categories forcolumns, a quick glance reveals the total expenses
your expenses that correspond to the soleand whether there is a profit, a loss, or break even for
proprietorship business tax return, Schedule C Businessthe month.
Income or Loss, such as:4. Carry the income and expense totals to a summary
- Advertisingsheet with a row for each month, but the same
- Car expensesIncome and Expense columns. Total the columns for a
- Equipment and software purchasesyearly summary of all your expenses by category.
- Professional feesThis summary spreadsheet also makes tax
- Contract laborpreparation easy since all the expenses are in
- Insurancecategories and summed.
- Office supplies