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Teach Yourself Bookkeeping Business Essentials

If you're starting a small business, or just want to keep a close eye on your personal finances, learning the basics of bookkeeping is an essential skill. While it may seem daunting at first, with a bit of practice and guidance, anyone can become proficient in bookkeeping.

In this guide, we'll be going over some bookkeeping essentials to help you get started.

Income and Expenses

The most basic aspect of bookkeeping is keeping track of income and expenses. When income is generated from a sale or a service provided, it should be recorded as income. Similarly, when expenditures are made to support the business, they should be recorded as expenses. Keeping track of these two items is essential to understanding how the business is performing.

Chart of Accounts

A chart of accounts is a breakdown of all the accounts a business has. It includes everything from revenue, expenses, assets, and liabilities. This comprehensive list will allow a business owner to maintain a clear and organized record of all financial transactions.

Double-Entry Bookkeeping

Double-entry bookkeeping is the practice of recording a financial transaction twice, to avoid errors. This method requires balancing debits and credits to ensure the books are accurate and the accounts balance. By using this method, bookkeepers can ensure that no transaction is left unaccounted for, and that everything is accurately documented.

Bank Reconciliation

Comparing bank statements with a business' internal records is known as bank reconciliation. Bookkeepers should regularly compare their records with bank statements to ensure all transactions are accounted for. This reconciles the balance on the bank statement with the general ledger, to ensure the statements are accurate.

Bookkeeping may seem intimidating, but with practice, it can become an essential skill for any small business owner. Following these essential practices will allow you to keep track of all your financial transactions and ensure your business is running smoothly.

Remember, there are resources available if you ever need help. With some practice and guidance, you can learn to manage your business finances with ease.



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