Think You Can Do Quickbooks® Yourself?
Since 1994 Quickbooks has been the most popular accounting program for small businesses. It is geared towards business people who had no formal accounting training. For about $200 you can set up a computer to handle just about any type of business. Here are the basic steps:
- Set up a chart of accounts specific for your business, including bank accounts, credit cards, fixed assets, loans and other assets and liabilities. The income and expense categories should be detailed enough to be meaningful, but broad enough to be combined and put on a tax return.
- Enter opening balances for cash, credit cards, etc. Unless you are starting on January 1st, enter all financial transactions going back to January 1st so that you will have a full calendar year needed for your tax return.
- Each bank transaction, like a check, must be entered with the date, payee, amount, and category code. Items with more than one category (like a Costco expenditure) must be split.
- Many categories must be further separated according to whether they are personal or business. For example meals, cellphone, automobile, travel, etc. can sometimes be tax deductible. Certain expenditures must be capitalized and depreciated, like computers, automobiles and furniture.
- Bank and other accounts should be reconciled on a regular basis. Each transaction should have a notation as to whether it is reconciled or not.
- Prepare reports for balance sheet and profit or loss statements for various time periods.
There are, of course, plenty of resources to help you setup and maintain your QuickBooks accounting program. But even the Quickbooks for Dummies™ book is over 300 pages long. Why waste time trying to become an accountant?
The experts at Accounting for Everything are here to help.