1 bookkeeping success! we need a certain delight in tending the books, like in tending a garden. ~...
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Bookkeeping Success!
“We need a certain delight in tending the books, like in tending a garden.”
~ Connie Harvey
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Organization and Filing * Divide your paperwork into 4 sections:
Action needed to be taken (folder - bills to pay, etc) Action taken but not yet recorded in the system Completed paperwork ready to be filed (tray) Completed paperwork filed away (big filing cabinet)
Set up and label file folders: By Date – All items in Daily, Weekly or Monthly By Function – Bank Statements, receipts, etc. Alphabetically – Customers and Vendors
* Credit to: Bookkeeping is not a four-letter word by Janet L. Redick
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It’s all about balance
Assets – Liabilities = Owner’s Equity
DebitsCredits
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Debits and Credits Assets
Bank Accounts Accounts Receivable Buildings/Land Equipment, Vehicles, etc Inventory Pre-paid Expenses
Liabilities Loans Credit Cards Accounts Payable Sales Tax Payable Payroll Liabilities Gift Certificates Sold Rent Deposits Held
Equity (Shareholders)
Something to Remember:
Assets, Liabilities and Equity are part of the Balance Sheet and are normally on the top of the list in the Chart of Accounts and have a register when you double-click.
Income, COGS, and Expenses are a part of the Profit & Loss Statement and are normally on the bottom of the list in the Chart of Accounts and have a quick report when you double-click.
5Note: Before electronic bookkeeping, there were many journals to post to.
Double Entry Accounting
Q: What does that mean?
A: Posting Debits and Credits to the Balance Sheet and/or the Profit & Loss Statement.
Note: The Balance Sheet is for Reality, and the Profit & Loss is for Reporting
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In an Invoice:
Debit Credit
Accounts Receivable Sales
Sales Tax Payable
Cost of Goods Sold Inventory Asset
In a Sales Receipt:
Debit Credit
Undeposited Funds Sales/Sales Tax Payable
Cost of Goods Sold Inventory Asset
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Double Entry Accounting►QuickBooks does it for you behind the scenes:
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In the Enter Bills:
Debit Credit
Inventory Asset Accounts Payable
Expenses
In the Payroll:
Debit Credit
Payroll Expenses Checking
Payroll Liabilities
Double Entry Accounting con’t…►QuickBooks does it for you behind the scenes:
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Some Pitfalls to Avoid: Accounts Receivable
Recording payments without using “Receive Payment”
Accounts Payable Recording Checks without using “Pay Bills”
Sales Tax Payable Recording Checks without using “Pay Sales Tax”
Payroll Taxes Payable Recording Payments without using “Pay Payroll Liabilities”
No more “widows and orphans”!
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The General Ledger Your best tool for entering transactions you don’t know what to do with, such as:
Daily Sales from a cash register tape with deposits going to several accounts due to merchant card service, cash payouts, etc.
Owner Investments and Draws
Adjustments
“The Catch All”
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The Financial Statements
Balance Sheet Snapshot at the moment of all accounts
Statement of Cash Flows Cash movements during a given time period derived
from operating, investing and financing activities
Profit and Loss Income and expenses during a given time period
The Big Picture
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“Best Practices” or Good Habits Enter transactions at least once a week
Cash transactions Checkbook transactions Credit Card transactions, etc.
Reconcile all statements once a month Checking and Saving Statements Credit Card Statements Loan Statements, etc.
Bac
k up
of
ten
Think of it like watering your plants, or brushing your teeth… you do it as often as is needed to stay healthy.
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Another Good Thing To Do:
Map yourChart of Accountsto your Tax Form
(Schedule C, 1065, 1120 or 1120S)
Tax-Line Mapping is in the “Edit Account” window.
*Opening Balance Equity should come to $0.00
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Employees and Payroll 941 – Federal Withholding Taxes (quarterly)
941N – Nebraska Withholding Tax (quarterly)
UI Connect – State Unemployment Tax (quarterly) Note: The above three taxes may need to be deposited more frequently.
940 – Federal Unemployment Tax (annually)
W-2’s and 1099’s W-3 – Federal Withholding Reconciliation W3-N – Nebraska Withholding Reconciliation W-4’s
Basic Forms:
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Other Taxes Sales and Use Tax – Form 10
Monthly, Quarterly, or Annually Property Tax
Semi-Annually or Annually Income Tax
Schedule SE Schedule C or F Schedule A Form 1040 (or appropriate form)
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Prompts and Automation Laminated Charts and Reminders
Visual color coded instructions See examples…
Pop-ups from your computer calendar, QuickBooks, Outlook, Hotmail, etc.
Templates, Programs and Calculators Data input forms and reports using computer
programs such as QuickBooks, Excel and Access See examples…
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Federal Taxes: www.irs.gov Click Business,
then Small Business/Self-Employed
State Taxes: www.revenue.ne.gov Click Business, then choose topic.
Business Knowledge Center: www.netmba.com General Information on Management and Business
“Help” on your computer program menu bar. QuickBooks has an excellent Help tool
Know where to get helpOr, call your CPA or your REAP
Business Specialist
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Tend the
Books
Give the Books to another to tend
But don’t neglect the
Books…. Or your business can’t succeed
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“Where you tend a rose,~ a thistle cannot grow.”
Frances Hodgson Burnett