Bookkeeping Made Easy - Tulsa, OK

Like any new skill, bookkeeping is hard until you have learned how it works and then do it regularly.

Bookkeeping requires a lot of time using bookkeeping software.

Not everyone has the right mindset or patience to sit in front of a computer paying attention to numbers and paperwork.

The idea of sorting through receipts and financial transactions and getting it into good order is likely unappealing to many people.

Those who find bookkeeping boring will be unmotivated to do it, which will make it seem hard.

Some aspects that are hard at first are things like:

• knowing what type of expenses are tax-deductible (this is very important)
• understanding what type of transactions go on the balance sheet
• figuring out how to do double-entry bookkeeping.

When using bookkeeping software you may be able to get by without knowing much about the double-entry process which involves ledgers and journals. This is because all the major ones like QuickBooks and Xero make bookkeeping entries easy to process.

How? By allowing the business bank transactions to automatically feed through into the software, so all you have to do is go to the front screen, allocate those transactions to an account category, and click ok.

You do not have to prepare a journal to write the transactions into the ledgers like back in the day of manual bookkeeping. However, even within such great software, there will be things that make bookkeeping hard, like:

• making sure the software is set up correctly to start with (though they usually provide a guide with the steps on what to do)
• or not knowing how to enter a business expense that was paid for with personal cash
• or not knowing how to process a refund or manage a loan and its repayments.

Let's look at this from two perspectives:

• Bookkeeping by the owners of small businesses
• Bookkeeping as a career

If you are a small business owner thinking about doing your own bookkeeping, which is common for small start-ups, you must be prepared to invest time and brain-power to learn bookkeeping basics and make it less hard, including:

• issue sales invoices and monitor receivables (not all business types have to do this)
• allocate your bank/credit card transactions into the correct account categories
• reconcile your accounts
• pay bills on time
• run an Income report and Balance Sheet and understand them
• save money to pay your tax bill

This can be daunting to somebody who is already time-strapped just getting their business up and running and finding customers. You may already know the measure of your self-discipline and are happy to sit down once a week or once a month to process your paperwork and transactions in the bookkeeping software.

Your tax authorities have rules that must be followed when it comes to running your business and keeping records. If they decide to audit your business records, will your records hold up under scrutiny? Long before the chance of getting audited, you should be sure that you:

• have been categorizing every financial transaction from all financial sources into the correct place at the correct date in the bookkeeping software.
• are keeping all your receipts and other paperwork to prove your business financial transactions.
• calculate and pay your taxes on time and in full.

This means:

• not trying to push through personal expenses as business ones.
• recording every item of income (even if its cash) because this affects your tax payable – if you under-report your income you could be slapped with penalties.
• knowing which transactions go on the Income Statement (tax-deductible expenses) and which ones go on the Balance Sheet (non tax-deductible).
• having a robust filing system (whether paper or digital) because records have to be kept, and easily found, for many years.
• treating assets and depreciation appropriately….

… just to name a few considerations.