Bookkeeping Success

Bookkeeping Success! “ We need a certain delight in tending the books, like in tending a garden.” ~ Connie Harvey

Organization and Filing *
Divide your paperwork into 4 sections :
Action needed to be taken (folder - bills to pay, etc)
Action taken but not yet recorded in the system
Completed paperwork ready to be filed (tray)
Completed paperwork filed away (big filing cabinet)
Set up and label file folders :
By Date – All items in Daily, Weekly or Monthly
By Function – Bank Statements, receipts, etc.
Alphabetically – Customers and Vendors
* Credit to: Bookkeeping is not a four-letter word by Janet L. Redick

It’s all about balance Assets – Liabilities = Owner’s Equity Debits Credits

Debits and Credits
Cash on Hand
Bank Accounts
Assets
Accounts Receivable
Cost of Goods Sold
Expenses
Owner Draw
Owner Investment
Loans (Liabilities)
Accounts Payable
Sales Income
Sales Tax Payable
Other Income
Owner’s Equity

Proper Chart of Accounts
In Order By type
A-01 Checking (the A sset, “Checking”)
A-02 Savings (the A sset, “Savings”)
L-01 Sales Tax Payable (the L iability of Sales Tax)
I-01 Widget Sales (the I ncome from Widget Sales)
E-01 Advertising (the E xpense of Advertising)

Proper Chart of Accounts
In Order By Number
1000 – 1999: Asset Accounts
2000 – 2999: Liability Accounts
3000 – 3999: Equity Accounts
4000 – 4999: Revenue Accounts
5000 – 5999: Cost of Goods Sold
6000 – 6999: Expense Accounts
7000 – 7999: Other Revenue
8000 – 8999: Other Expense

Double Entry Accounting ►It’s just the transfer from one account to another
Debit “Postage Expense”
Credit “Owner’s Investment”
Debit “Undeposited Funds”
Credit “Widget Sales”
Credit “Sales Tax Payable”
Debit “Checking at City Bank”
Credit “Undeposited Funds”
You buy stamps for the business with cash in your pocket. Today you sell 30 Widgets and charge Sales Tax, but keep the checks in the drawer until Friday. On Friday, you deposit all the checks into the First City Bank.

Best Practice:
Match
your
Income And Expense
Accounts
to your
Schedule C

The General Ledger
Your best tool for entering transactions
you don’t know what to do with, such as :
Daily Sales from a cash register tape with deposits going to several accounts due to merchant card service, cash payouts, etc.
Owner Investments and Draws
Adjustments
“The Catch All”

What would you do?
1/31/07 -You used a VISA card to buy gas.
2/3/07 - You used a VISA card to send flowers to your uncle’s funeral in Timbuktu.
2/5/07 - You used a VISA card to buy supplies.
2/15/07 - You receive a bill from VISA.

Debit Credit
Checking Fuel Other Expense Supplies
Debit Credit
Fuel Owner’s Draw Supplies VISA Card XXXX1234 Interest Expense (if any) VISA Card XXXX1234 Checking
Debit Credit
Credit Card Expense Checking

“Best Practices” or Good Habits
Enter transactions at least once a week
Cash transactions
Checkbook transactions
Credit Card transactions, etc.
Reconcile all statements once a month
Checking and Saving Statements
Credit Card Statements
Loan Statements, etc.
Back up often Think of it like watering your plants, or brushing your teeth… you do it as often as is needed to stay healthy.

The Financial Statements
Balance Sheet
Snapshot at the moment of all accounts
Statement of Cash Flows
Cash movements during a given time period derived from operating, investing and financing activities
Profit and Loss
Income and expenses during a given time period
The Big Picture

Employees and Payroll
941 – Federal Withholding Taxes (quarterly)
941N – Nebraska Withholding Tax (quarterly)
UI Connect – State Unemployment Tax (quarterly)
Note: The above three taxes may need to be deposited more frequently.
940 – Federal Unemployment Tax (annually)
W-2’s and 1099’s
W-3 – Federal Withholding Reconciliation
W3-N – Nebraska Withholding Reconciliation
W-4’s
Basic Forms:

Other Taxes
Sales and Use Tax – Form 10
Monthly, Quarterly, or Annually
Property Tax
Semi-Annually or Annually
Income Tax
Schedule SE
Schedule C or F
Schedule A
Form 1040 (or appropriate form)

Prompts and Automation
Laminated Charts and Reminders
Visual color coded instructions
See examples…
Pop-ups from your computer calendar,
QuickBooks, Outlook, Hotmail, etc.
Templates, Programs and Calculators
Data input forms and reports using computer programs such as QuickBooks, Excel and Access
See examples…

Federal Taxes: www.irs.gov
Click Business,
then Small Business/Self-Employed
State Taxes: www.revenue.ne.gov
Click Business, then choose topic.
Business Knowledge Center: www.netmba.com
General Information on Management and Business
“ Help” on your computer program menu bar.
QuickBooks has an excellent Help tool
Know where to get help Or, call your CPA or your REAP Business Specialist

Some Pitfalls to Avoid:
Remember, what goes in, must come out!
Accounts Receivable
Recording Customer payments incorrectly
Accounts Payable
Recording Checks without using “Pay Bills”
Sales Tax Payable
Recording Checks without using “Pay Sales Tax”

Tend the Books Give the Books to another to tend But don’t neglect the Books…. Or your business can’t succeed

“ Where you tend a rose, ~ a thistle cannot grow.” Frances Hodgson Burnett

Bookkeeping Success

by ConnieRHarvey on Jul 28, 2009

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Bookkeeping Success — Presentation Transcript