Now that you understand the basics of bookkeeping and accounting, it is time to create your small business accounting system says Aron Govil. The best way to do this is by creating an Excel spreadsheet. This will allow you to keep track of your income and expenses on a monthly basis.
Here are the steps for creating your small business accounting system:
1. Create a master Excel spreadsheet
The master spreadsheet will be the control center of your accounting system. You should include all of your income and expense categories on this sheet. Here is an example:
2. Add the monthly totals to each category
Once you have created your master spreadsheet, you can create a new sheet for each month of the year. You can use the dropdown function to automatically fill in your monthly totals.
1) Go to cell A2
2) Press “Alt+D” to open the Data menu
3) Select “Data Validation” from the list
4) Click on “Source” tab and enter your range of cells (in this case A2:A21)
5) Click on “OK” and “Close”
6) Press “Ctrl+Shift+Down Arrow” to fill in the rest of your sheet
3. Fill in the totals row
Every time you add a new sheet for a new month, make sure that you add a row at the bottom of the spreadsheet with the total of all your income and expenses.
4. Keep track of your profit/loss
This is an important step if you are using this system to run or grow your business. This will allow you to see the profit/loss for every month. Here is how you do it:
1) Go to cell B22
2) enter the formula: =SUM (C21:C20)
This will add up all your expenses and income for this month. Now you can compare it to the previous months! Remember that these numbers are just for demonstration purposes, so feel free to change any of them as needed says Aron Govil.
These four simple steps should help you create your own small business accounting system using an Excel spreadsheet. Of course, you will need to adjust it over time to make sure that you are keeping track of all your income and expenses.
Now that you have a basic understanding of accounting and bookkeeping principles, it is time to put them into practice by setting up your own small business accounting system.
- The first step is to create an Excel spreadsheet for your business. This will allow you to track your income and expenses on a monthly basis.
To get started, open a new Excel workbook and create columns for the following headings: “Date”, “Account Title” (i.e. Description), “Credit” (if an amount is positive), or “Debit” (if an amount is negative), plus the dollar amount, which will be entered in the next column to the right. For instance, if you are tracking cash on hand, this would be a debit entry since it represents money taken out of your account by making a change or withdrawing it from your savings at the bank. If you are tracking monthly expenses, then there would be credit entries since they represent receipts into your account due to buying supplies or paying bills for electricity and water usage in your office/business space says Aron Govil.
Now that you have created your spreadsheet, enter your income and expenses. By tracking these transactions on a monthly basis, you will get more organized, reduce accounting errors and save more money by not having to pay an outside firm or accountant to do it for you. So keep track of every penny that comes in and goes out.
- The next step is to download the free trial version of our software called AccountEdge, which will create all necessary charts of accounts (profit & loss statements), accounts payable invoices, accounts receivable invoices, project costing reports, and more so that you can get started right away with your business accounting system. If you are not ready yet due to some reason or another, don’t worry because there’s no commitment from now until December 31st, 2016.
Simply visit our website and click on the “Free Trial” button at the top right-hand side of the page to get started. And, if you have any questions, please do not hesitate to contact our team of accounting experts for assistance.
Now that you understand the basics of accounting and bookkeeping, it is time to set up your own small business accounting system. The first step is to create an Excel spreadsheet for your business. This will allow you to track your income and expenses on a monthly basis.
Now that you have created your spreadsheet, enter your income and expenses explains Aron Govil. By tracking these transactions on a monthly basis, you will get more organized, reduce accounting errors and save more money by not having to pay an outside firm or accountant to do it for you. So keep track of every penny that comes in and goes out.