| Starting a small business out of your home, offering | | | | telephone & cell phone, air fare, office supplies, |
| products or services like business consulting, | | | | etc. This is an excellent place to identify the various |
| photography, selling on the web or a MLM? You are | | | | Business Expense Accounts you need to set up for |
| now faced with tracking all your expenses and | | | | your business accounting books. To complete your |
| revenues for your business and you certainly don't | | | | business Chart of Accounts, include a Business Bank |
| have the money yet to engage a bookkeeper or | | | | Account, Sales, COGS (Cost of Goods Sold), Sales |
| accountant. If your business is a sole proprietorship, | | | | Tax Collection, Marketing Expense and others as |
| whether it be a Canadian Proprietorship or a | | | | required. Each of these Accounts will be a listed as a |
| US-based Proprietorship, you do not require an | | | | title across the top of each column of your Synoptic |
| accountant to submit your company financials (books) | | | | Journal. Each row (line item) will be the individual journal |
| to the IRS (USA) or Revenue Canada). Your business | | | | transactions entered by you. The journal transactions |
| revenue and losses are reported as part of your | | | | are grouped and summarized for each business |
| annual personal income tax. For this small business | | | | month; usually, January through December. |
| start-up, you won't need to buy fancy accounting | | | | So your Synoptic Journal would look something like this |
| software, like Quick Books or AccPac to track your | | | | Sample Synoptic Journal at |
| business. | | | | The column headings might be in this order (from left |
| Only as part of incorporating Bizfare Enterprise Inc in | | | | to right): |
| 2005 was it a requirement to engage an accountant. | | | | DATE | DESCRIPTION | BANK DEPOSITS | BANK |
| My accountant did insist on using Quick Books | | | | WITHDRAWALS | SALES REVENUE | COGS | |
| software for my business accounting. Up until then | | | | SALES TAX COLLECTED & REMITTED | |
| using a simple spreadsheet template served my | | | | OFFICE SUPPLIES EXPENSE | EXPENSE #2 | |
| business accounting needs for over ten years. This | | | | EXPENSE #3 | ETC |
| simple spreadsheet accounting stood the test of | | | | TIP #2: Unless your business is Incorporated or an LLC, |
| multiple audits by Revenue Canada (CRA and | | | | you don't need to go through the expense of opening |
| Revenue Canada Goods and Services Tax. Both the | | | | a business account with your bank. Usually Business |
| hardcopy columnar pad and an electronic spreadsheet | | | | accounts charge a higher monthly fee, charge for |
| version of my financial books were accepted by | | | | printing checks (cheques) and don't offer any interest |
| Revenue Canada. (BTW the audits disclosed more | | | | on your monthly account balance. Instead, open a |
| ways for me to claim back additional taxes for the | | | | separate personal bank account (maybe savings). This |
| previous three years! Now that's my type of audit!) | | | | will show the 'taxman' that you are keeping the |
| In your new start-up business venture, you likely will | | | | business separate from your personal banking. |
| generate somewhere between 10 to 30 accounting | | | | Remember you are a sole proprietor and all your |
| transactions per month. These transactions would be | | | | business income (and losses) are to be applied directly |
| items like Expense, Revenue (sales), Liability (Loan) | | | | to your personal income tax submission ( a s per IRS |
| type transactions and Sales Tax (Federal + State | | | | and CRA). |
| Provincial) Collection/Deductions. These transactions | | | | To save you time and make is very simple, I have |
| are further broken down into various Business | | | | already created a simple spreadsheet Synoptic Journal |
| Accounts. All the Accounts you set up for your | | | | template that performs all the calculations for each |
| business is called a Chart of Accounts. Recording your | | | | month and rolls up the 12 business months so it can |
| business financial transactions (Journal Entries) can be | | | | easily be included in your annual personal income tax |
| executed with pen and ink on an accounting columnar | | | | preparation. This Synoptic Journal template has Debit |
| pad or electronically with your computer using a | | | | Credit checks and balances, tracks sales taxes, |
| spreadsheet program (MS Excel, Open Office, Star | | | | mileage and totals each account for your entire fiscal |
| Office). | | | | year. If you want this FREE Bookkeeping template, |
| Whether you employ electronic or hardcopy media, | | | | you can get it at Communicate Innovate. With a few |
| you need to develop a simple Journal template to | | | | key strokes, which will help identify yourself, I will gladly |
| create your Business Synoptic Journal. This Synoptic | | | | send you this FREE Synoptic Journal Template and |
| Journal format has the advantage of allowing you a | | | | also any future Small Business Tips. |
| complete view of all your individual journal entry | | | | TIP #3: One Rule of Accounting is that every time you |
| transactions against all your various Business | | | | record a journal entry (line item which applies the |
| Accounts. Creating this Synoptic Journal is easier to do | | | | transaction against the appropriate business accounts) |
| than you think and requires no prior accounting or | | | | the Debits and Credits MUST REMAIN EQUAL at |
| bookkeeping knowledge. | | | | ALL Times. This Debit Equals Credit calculator is built |
| TIP #1: You could further reduce the accounting line | | | | into this FREE Bookkeeping Template. When you have |
| items (Journal Entries) by consolidating like items such | | | | completed entering a line item (journal transaction), |
| as 'all the Sales for the month' and 'all parking receipts | | | | check to ensure that the amount the the Debit cell |
| for the month' into one totaled line item for the month. | | | | equals the amount in the Credit cell. If they are not |
| Where do you start to identify the various Business | | | | equal, you have not entered the amounts properly in |
| Accounts required for your Synoptic Journal? | | | | your journal transaction. Correct the problem before |
| If you currently work for a company or government, | | | | entering your next journal entry. |
| secure of one of their employee expense forms. Look | | | | You are now equipped to capture your business |
| at each of the areas identified as expenses - meals, | | | | financial books with some simple accounting software. |
| mileage, hotel accommodations, taxi, car rental, | | | | Happy bookkeeping! And Happy Selling! |