How To Do Your Own Books Self Employed

How To Do Your Own Books Self Employed

Here is a quick-start guide on how to do your own books self employed. I have summarised the key bookkeeping tips that you need to know about below.

Bookkeeping Steps

Does the thought frighten you about how to do your own books self employed?

Does your mind boggle at the idea?

Are you worried that by not maintaining your accounts you will be penalized by the Internal Revenue Service?

Have no fear.

How To Do Your Own Books Self Employed in 3 Steps

We have outlined a 3 step process which will simplify bookkeeping and accounting for you and your small business.

Abide by these steps and you won’t need to worry about it anymore.

Keeping books action is a three-step process. You can manage bookkeeping and accounting for your business by following them.

1) Receipts and bills

Receipts and bills are the obvious starting place.

You need a record for every business transaction and each your company is involved with.

These records must contain the sum, the date about buy or that sale.

Pretty much all companies maintain a system of accounts, while you need to store money bills in bank accounts.

Choose a system that fits your Company needs.

I highly recommend FreshBooks if you want a very low-cost way to send your invoices and get paid quicker, plus manage your books online.

Try it Free

2) Summarizing expenditure and income records

A summary of expenditure and revenue can be drawn up into management accounts or a profit and loss statement.

Enter it in a ledger, ideally on a PC.

The more sales you make, these more often you need to post to your ledger.

For instance, a busy retail store might need to do that on a regular basis.

A company with just a few transactions like a day care centre or dog service, per month can do that monthly or weekly.

This is where accounting software comes in very handy to save yourself a boatload of time.

You can use an accounting software application that will generate ledgers that you have entered to simplify this process.

Whatever you choose, keep in mind that the cornerstone of bookkeeping and accounting for your company is regularity and completeness.

3) Creating financial reports

Financial reports bring together key pieces of financial details about your company.

The reports you’ll have to create on a regular basis are a money flow analysis, a profit and loss forecast and a balance sheet.

The purpose of financial reports is to yield you a much better understanding of where your company is headed and whether it’s making the kind of profit that it’s capable of.

Conclusion

In a nutshell, knowing how to do your own books self employed. means that you can not only save money on taxes but you also get the big picture of your business .

Think about it, do you have adequate cash flowing through your business to pay bills on time?

Are you able to stick to your planned spending budget and do you need to review your earnings estimate?

Towards the end of the year, you’ll have a clearer understanding of one’s business income making potential and be capable to plan ahead for the future.

On a final note, there’s no denying the importance of cautious bookkeeping and accounting for your company, it needn’t be the stuff of nightmares. Use it correctly as an entrepreneur is determined to succeed.