The Basics Of Bookkeeping For Start Ups

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The Basics Of Bookkeeping For Start Ups
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• If youre the owner of a start-up or recently
  incorporated business, it can be helpful to know
  the basics of bookkeeping, whether you will be
  using the services of a paid professional, or
  not. Here are 4 main steps of the bookkeeping
  process that it can be helpful to understand
• Gathering documents
• These may include cheque records, deposit
  records, bank statements, bills from vendors,
  receipts for purchases and invoices issued to
  customers.
• Entering information
• Information from source documents must be entered
  into journals and accounts.

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• End of period procedures
• These can include balancing accounts and
  performing reconciliations.
• Closing books
• Its vital that the books for each set period are
  closed.
• Here are a few of the bookkeeping terms explained
  in a little more detail for new small business
  owners

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• Cash
• Most business transactions will go through your
  cash account and can be divided between cash
  receipts and cash disbursement. At the end of
  each month, its important to reconcile your bank
  account for any outstanding transactions or
  mistakes. The total reconciling items should add
  up to the difference between the dollar amount on
  the statement from the bank and the dollar amount
  in the accounting records.

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• Accounts receivable
• This describes the money that is due to your
  business from your clients for products or
  services purchased, but not yet paid for. A sub
  ledger will have the details of each different
  account and each one should be reconciled to the
  total accounts receivable listing to make sure
  that they balance.
• Inventory
• This can refer to the ready-to-sell, work-in
  progress or raw-goods inventory, and physical
  counts of inventories should be carried out
  regularly to ensure that they correspond with the
  accounting records.

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• This can be a very complicated procedure if any
  part of the inventory tracking procedure is not
  carried out accurately.
• Accounts payable
• Akin to accounts receivable, your payables are
  usually representative of money that suppliers
  are owed from the business. As with accounts
  receivable, its highly important that the
  account is reconciled to make sure that what is
  being recorded is for current and ongoing
  financial obligations.

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• Loans payable
• In smaller companies, loans payable refers to
  amounts that have been loaned to the business
  from shareholders, friends or family. Even if
  your company is not currently paying the loan,
  its advisable to be aware of any interest that
  is to be charged.
• Sales
• This is the income that a company has earned
  directly through the sale of its products or
  services.

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• Expense accounts
• All expenses that a business has incurred will be
  recorded here, in the expense accounts. They are
  usually divided into different categories such as
  office expenses, rent, insurance and cost of
  goods sold.
• Payroll expenses
• This can prove to be one of the biggest expenses
  for a company, and these accounts can include
  salary that is paid to employees, vacation paid,
  employee benefits and EI contributions, or
  Employment Insurance.

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• Understanding the basics of bookkeeping when you
  own a start-up is always helpful, but be advised
  that it is by no means a substitute for a paid
  professional.
• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax preparation service
  Coral Gables. If you are looking for tax
  preparation service in Miami, Heyer Associates
  would be a right option.