Bookkeeping

Small business bookkeeping

How to do bookkeeping for small business

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Answer

  1. 28 Answers
    This answer is edited.

    There are several ways to record revenue, accounts receivable, accounts payable, bank and credit reconciliations, and equity.

    1. Plan for major expenses for the first year of operation then account for growth of the business over milestone years such as 3 years, 5 years, and 10 years. Add a realistic percentage for unexpected expenditures. (Budget)
    2. Track expenses. (Accounts Payable)
    3. Record money received for sales revenue, services/product, personal savings etc. into the business bank account. Proper record keeping ensures the business is not taxed for non-income. (Accounts Receivables)
    4. Maintain proper record of invoices. Note: if invoices are inaccurate, unpaid, or late, accounts receivables will be negatively affected. Set invoice terms. (Net 30 days, 60 days, 90 days, or exception)
    5. Separate money for taxes. (As of 2019, average Small Business Tax Rate was 19.8% and a flat 21% for a C-Corporation. Businesses taxes vary based on entity type.)

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