Now that a new year has begun, why not start out right by getting your financial records in order. If you don't have a clue about where to start, let me give you some good tips as to how to do that.
- First and foremost, find a good, easy to learn financial software program to record your transactions in.
- To begin with entering your data, you do not need any of your prior year balances or transactions for your sales (income), cost of sales, or expenses. All of these accounts start the year with a zero balance.
- For your bank checking accounts and credit cards, balances will carry forward (which you will enter into your starting balances) and only transactions that have not cleared for the prior year should be included in these balances.
- Accounts payable is a current liability so only outstanding accounts payable need to be put into your current year's records.
- Accounts receivable invoices which are open are only required to be put into your beginning year records.
- Once you have gotten these and your owner's equity, and retained earning balances in, you should be on the right track.
Let me suggest an easy software program to record and account for all of your transactions would be QuickBooks. It is simple to learn and easy to navigate and will keep track of most small business records. There are many different versions, but for the average small business, QuickBooks Online or QuickBooks Pro (by industry) are great ones to try out.
So get your new year started out right with having your financial records tracked well with recording your transactions correctly instead of looking at the mounds of paperwork and wondering where it all goes.