Many small start-up businesses are off and running before any record system has been set up. There is money deposited into the new business checking account, some from invested funds and some from sales. Money has been paid out for equipment and supplies, some by check and some by cash out of pocket or from sales receipts.
This informal method of cash receipts and disbursements needs to be formalized. The bookkeeping system does not need to be complicated. In most cases, you can continue to operate much as you have. You just need to do it in a way that leaves a few more tracks.
For example, make all purchases by check. The small miscellaneous cash paid-outs from your pocket (or the petty cash box) are reimbursed by a check with a listing of the expense codes. All your cash receipts are deposited into the bank. No more taking cash from the till for lunches, supplies, etc.
If all the money received by the business is deposited into the bank and all expenses are paid by a company check, the proper journal entries are easy to create from the bank statement.
If you are starting a new business, don’t wait until the end of the year and surprise your accountant with a box of miscellaneous receipts. That is the most expensive and least effective use of your accounting information. In addition to setting up the proper record system, We will provide you with guidance on other business, tax, and financial matters.
Small Business Accounting Services available
Bank Reconciliation – Protect yourself and your small business. Timely reconciling and objecting to your bank about unauthorized checks. Identify lost checks or deposits. Get a better idea how your business is doing with an accurate financial statement.
Income Statements– Track your revenue and expenses, Identify expenditures, Determine your tax liabilities.
Balance Sheets– Get a snapshot of the financial health of your business.
New business Start-up Consultations
You can benefit from our wide-ranging knowledge and expertise. Contact us today and learn more about our unique capabilities.
Edith Christian CPA
N9 W29360 Thames Road
Waukesha, WI 53188