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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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NOTES:

Only Accumulated Depreciation has a negative balance.

Inspect theSales Tax and

Payroll Tax Liabilities Regularly.

Verify the Open Invoices and Bills

Payable Regularly.

Reconcile All Bank, Credit Card and

Loan Statements, making sure to deal

with errors right away!

Go through the “QuickBooks Diagnostics” document now…

1. Look at the Chart of Accounts (Ctrl A)

2. Look at the Open Invoices Report

3. Look at the Deposit Window

4. Look at the Pay Bills Window

5. Look at the Pay Sales Tax

6. Look at the Payroll

7. Look at the Items List

8. Look at the Profit and Loss report

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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 – Employee’s Withholding Allowance W-9 – Request for TIN (when hiring Contractors)

Basic Forms:

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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 us at Efficiency Counts

402-460-6216

Or

308-340-7584

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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