Home
>
Small Business
>
Real World Accounting for Small Business Owners

Real World Accounting for Small Business Owners

If you're like me, you love accounting. It's so fascinating and such an ingenious system. Don't you just think that Double Entry Accounting is the most beautiful creation of all humankind?

Okay, let's get real. You probably think accounting is boring and best left to pencil pushing geeks (like me!). I mean?BOOORRRRING! Total Snooze-fest!

Well, my friend, I'm about to introduce you to Real World Accounting for Regular People. But, be careful, it just may change the way you look at accounting FOREVER! In fact, one of my clients looked up from a spreadsheet one day and said, "Wow, I never knew accounting could be FUN!" You just might have the same experience.

For starters, a lot of people think accounting is about math, which is an immediate turnoff. Although accounting does include math, it's more like a foreign language. All you need to do is learn the parts of that language that actually apply to you. Think about visiting a foreign country. You don't need to be fluent in the entire language. You just need to know the important things like what to order (or not order) in a restaurant, how to get directions, and how ask where the bathroom is. It's the same thing with accounting. You need to know what you need to know and the rest is unimportant. I mean, do you really need to know about corporate accounting practices or off shore financial transactions. Probably not.

So, how do you figure out what you need to know when you don't even know where to begin? Follow me and I'll show you!

The first thing you need to know is this. You must, must, must keep your personal finances and your business finances separate. Using your personal checkbook for all your transactions is a bad way to go. Here's why:

? The Internal Revenue Service wants to know that you have a very clear distinction between your personal affairs and your business affairs. They want details. If you try to pass off personal expenses as business expenses, you're violating tax laws. They don't like that.

? If you ever plan to borrow money for your business or get credit from your vendors, your lender or vendor will want to see detailed records of your business performance. Handing them your checkbook register is not going to make them want to give you money or sell to you on credit.

? You need to know how your company is performing at all times so you can plan ahead, make adjustments in your operations, and make informed decisions.

? The more accurate your records, the more accurate your tax return. It prevents you from missing deductions.

? It's the only way you'll know whether your business is making money or if you're just kidding yourself.

So, if you don't have a separate checking account for your business, go get one. It's easy and inexpensive and it will give you clarity on how your business is really doing.

The next step is your accounting system. Now, when I say "accounting system" I'm talking about an organized way of keeping track of your records. It can be computerized or it can be the old fashioned pencil and paper route. The important thing is that a) you have one and b) you use it.

Finding a System That Works For You

Your record keeping system needs to be designed so that it works for you. It should be:

? Simple to understand
? Flexible and adaptable to changing needs
? Inexpensive to develop and maintain
? Require little time to maintain
? Be handy and convenient to use

If you use a computerized accounting software package like QuickBooks, all those qualifications are met. I generally recommend QuickBooks to my clients because it's easy to use and you can also find local support for set up and troubleshooting. I don't whole heartedly recommend QuickBooks because I think parent company Intuit is losing touch with its core customer (we, the small business owners of the United States of America). There's too much nickel and dime-ing and poor support. But, at this point, it's still the most widely used system and certainly meets the needs of most small businesses as far as what it can do.

I do recommend that you get professional help in setting up your accounting system if you don't have an accounting background. It's a case of Garbage In Garbage Out. A well set up system will give you the best information with the least trouble. It's less expensive to have it set up right to begin with than it is to have it cleaned up later.

Whatever record keeping solution you choose for your business, the key to success is actually using it on a very regular basis. Otherwise, your business struggles and you're in constant danger of sliding into the Cash Flow Swamp.

Caroline Jordan is a small business mentor and consultant helping small business owners understand, diagnose, and improve cash flow in their businesses. For more information and resources to improve cash flow visit http://www.thejordanresult.com/mastering.html .

home cleaning services Deerfield ..

In The News:

DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.

Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.

Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.

Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Fake AI apps disguised as "ChatGPT" and "DALL·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.

Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.

Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.

Major data breach at Conduent exposes personal information of 10+ million people. Government contractor hit by cyberattack affecting Medicaid, child support systems.

Texas startup Janta Power raises $5.5M for innovative vertical solar towers that generate 50% more energy than traditional panels while using just one-third the land.