Setting up your financial records can be easy if you know how to do it properly. These is my top ten list for an easy setup.
1. Start with a separate checking account for your business only.
2. Create a good chart of accounts
3. Understand where transactions are to go within the chart of accounts, code them accordingly.
4. Know your source documents from the beginning.
5. Set up a good filing system for all source documents.
6. Find software that is easy to use to enter your data with good reports.
7. Create sales income accounts that will be charged on accounts receivable invoices correctly.
8. If you have inventory, make sure that there is a cost of goods sold item that will offset the sales item when inventory is purchased from customers.
9. Watch your dates when entering data. If it is a special order, the invoice will not be recognized until the full order is received.
10. Reconcile accounts from the beginning. This eliminates any missing information.