How to Set Up Accounting for Small Business

Posted by Pierre de la Fortune on August 10, 2015 @ 12:01 a.m.

Written by Jeremy Slaughter

Starting a small business can be as simple as registering a trade name and selling a service or product. Although specific details on business licensing and entity formations vary by state and industry, one common process required by all businesses is an accounting system. An accounting system is a compilation of monetary transactions entered into a ledger that is used to record financial records.

Step 1

Choose the specific software you will use to set up your accounting system. Accounting software like QuickBooks or Peachtree comes with pre-defined charts of accounts for various industries. Spreadsheet software such as Microsoft Excel or Open Office Calc does not have a built-in chart of accounts, so you must create one manually.

Step 2

Review your business model and financial statement reporting needs to assist in finding the best-suited chart of accounts. The chart of accounts is a list of the assets, liabilities, equity, income and expenses. Users of spreadsheet software can get a sample chart of accounts from www.netmba.com. After creating the chart of accounts, consider numbering the accounts. Although numbering is not required, it serves a purpose, and it is to help you locate accounts quickly and easily. If you choose to assign numbers to the chart of accounts, proceed to step three, otherwise move to step four.

Step 3

Assign a series of 1000 for each account type. For example, assets could be 1000 through 1999, liabilities could be 2000 through 2999, and equity could be 3000 through 3999. The first number in the chart of accounts represents the account type and each digit after can represent any pattern you choose. Step 4

Create your purchase order and invoice templates. Accounting software users will find templates within the software program. Spreadsheet users can download a variety of templates from the software manufacturer. Invoices should include the date, business information, customer information, amount due, payment terms or due date and a description of the services or goods provided. Begin using purchase orders for your purchases and invoices to record customer sales.

Step 5

Choose an accounting method--typically either cash or accrual. Cash method accounting requires users to record income received and expenses when paid. Accrual method accounting records income when earned and expenses when incurred. Due to the simplicity of record keeping and data entry, most small businesses report using cash basis accounting; however, an enrolled agent can help you determine which method best suits your accounting and tax needs.

Step 6

Record your transactions in the accounting system using bank statements and invoices. Expenses and purchases should decrease the bank balance. Income and loans should increase the bank balances.

For more info please visit: http://smallbusiness.chron.com/set-up-accounting-small-business-3860.html

Is this article helpful?

Comments

I need NEW Accounting software

QuickBooks SUCKS!!! Tammy

Good video but wow she has a big head

Good video but wow she has a big head

Cash money is so important

set up a company

wow gold

I find myself pleasant concerning wow gold http://www.ige.com.They may be pretty, model and even secure.

T Щ`Х` 󤭤 ǥ` n |

T Щ`Х` 󤭤 ǥ` n | http://ameblo.jp/mattlogary/entry-11976923221.html ͨ؜ Щ`Х` ` http://ameblo.jp/mattlogary/entry-11976927764.html Щ

եǥ ɥ

եǥ ɥ http://ameblo.jp/visonjp/entry-11998731136.html եǥ rӋ h http://ameblo.jp/ribenaa/entry-11998724640.html FENDI `` http://ameblo.jp/visonjp/entry-11998726571

FENDI ԩ`֩`

FENDI ԩ`֩` http://ameblo.jp/ribenaa/entry-11998734566.html FENDI եߥ`` http://ameblo.jp/hivison/entry-11998735696.html FENDI ĔȘ http://ameblo.jp/hivison/entry-11998735198.html ե

FENDI ۤꤿ߂

FENDI ۤꤿ߂ http://ameblo.jp/visonjp/entry-11998724579.html եǥ Ҋ֤ http://ameblo.jp/visonjp/entry-11998730570.html եǥ rӋ å http://ameblo.jp/hivison/entry-11998728

seo plugin

Hello Web Admin, I noticed that your On-Page SEO is is missing a few factors, for one you do not use all three H tags in your post, also I notice that you are not using bold or italics properly in your SEO optimization. On-Page SEO means more now than eve

nike air huarache run fb qs black white

nike air max humara all red grey,nike air huarache womens all white uk,?mens boston red sox 24 david price navy blue usa flag fashion mlb baseball jersey ,mens national league cincinnati reds 19 joey votto majestic orange 2017 mlb all star game

autolighttech

nike internationalist premium leather womens nike dunk sky high 2.0 nike free motion flyknit 2017 uk ,nike magista opus malaysia johor new era nfl knit hat u

uk black sale womens nike air vapormax flyknit

cincinnati reds 32 jay bruce 2012 fashion womens by majestic athletic jersey,texas rangers foam hat 50 ,monster energy hats india vs australia fox racing bobble

kobe 10 grinch nikeid 2016

adidas messi f50 ball pen ,nike magista obra grau blau kobe 10 grinch nikeid 2016 http://www.netmedcare.c

padres 34 rollie fingers coffee 1984 turn back the

onitsuka tiger mexico 66 black gold shoes on sale,nike cortez sp

nike hypervenom phinish astroturf war

new balance 501 womens all black ,adidas eqt support adv primeknit shoes size ni

air jordan 17 black for sale

nike air force 1 quai 54 flyknit racer,jordan 5 black laney for sale,nike air zoom 90 it white silver shoes on sale ,adid

cheap nike mercurial superfly v shoes

cheap nike lebron soldier 11 shoes,cheap ?air jordan 31 shoes,adidas projoator pulse rojo for venta nike cortez white green salomon mens xt hornet trail running shoe inserts nike mercurial superfly black

air jordan 13 og true red dot

womens nike internationalist all orange jordan 11 red october el cappy mens nike air max lunar 1 green white nike air max griffey fury freshwater

nike air max navigate mens shoe

kd 8 opening night black gold nike free fit 2 womens black nike air max 97 womens purple black nike air presto navy blue line adidas zx models,nike sb dunks for sale online,adidas x 16.3 tf bleu orange nike cortez basic leather red new balance 1400 herren grn nike air max black leather mens adidas superstar xeno yellow diamond,nike lunar tempo 447 country phone,

texans jersey cheap uk sale

air jordan retro 7 kids gold grey,nike free runs 3.0,nike soccers shoes blue grey mujeres nike dunk amarillo rojo nike air max 90 infrared new air max 95 purple

air jordan 13 womens sky blue for cheap

nike blazer vintage high white,nike air max 2016 for ladies,nike free trainer 5.0 v6 016 nike lebron 13 limited nike air max penny 96 all star nike air huarache femminile blu oro buccaneers new era hats,minnesota vikings cap for sale,penn state nittany lions 22 white jersey,puma speed cat black white nike kobe 9 white air

nike air presto orange or

adidas predator accelerator for sale california womens asics gel noosa tr

texas rangers fedora hat 40

reebok realflex transition 3,adidas yeezy boost 750 china qla,golden state warriors jersey stephen curry,nike shox junga 2 jordan 14 red suede retro 5 nike air huarache all grey nike dunk sky high colors gris rose nike kyrie 2 uk chaussures,tout gray nike free 5.0 v4 femmes chaussures

nfl hats free shipping

new york islanders nhl jersey yellow,san diego chargers nfl jerseys royal blue

karotorossian

nike air force 1 puerto rico sko coach tote rectangle wedding mulberry small bayswater mole grey nails nike flyknit lunar 2 pink flas cam newton female jersey nike flyknit racer triple black jd ugg classic short chestnut size 10 oakland raide

buymyhost

hermes male belt adidas gazelle black pink nik

tustinvillage

air jordan 1 i prada backpack handbags you like prada ribbon wallet adidas shoes stan smith pink nike air presto junior white converse adidas tubular runner strap red prada drivers navy beige mulberry bayswater bag brown jr mackage hattie coat 2016 tory burch black and gold bag new balance 998 metro burberry haymarket belt tory burch reva jelly flats on sale nike lebron 12 blue and pink elite jonas gray jersey new england patriots super bowl xlix 35 home navy blue pink and white dallas cowboys jersey nike lunarstelos herren blau mulberry taylor satchel black jacket air jordan super fly mint green red

deploygis

parajumpers coyote jacket art burberry classic scarf price bvlgari blue sapphire ring nike lebron 14 gold pink nike dunk low skate nike tennessee titans 2 rob bironas limited light blue te

sarkariresurt

white ralph lauren shirt john lewis sale ray ban justin transparent black grey womens nike kobe a.d. nxt shoes ray ban aviator rose gold mulberry continental wallet uk facebook nike air max uptempo 3 black mackage messenger laptop gets north face hyvent outer shell uses coach legacy ali handbag up roshe run beach red floral hermes scarf grey prada mens loafers brown 2017 corey liuget 94 jersey usa nike cortez premium long beach mlb jerseys atlanta braves 15 tim hudson navy blue jerseys nike flyknit

chipcolley

bracelet collier de chien hermes nike lebron 14 gold pink mulberry postman satchel purple gold womens nike air odyssey shoes parajumpers coat elbow and wrist burberry scarf 50 cashmere 50 wool mackage messenger settings user north face denali mens fleece jacket on sale uk

alarmselpaso

cedric ogbuehi 70 jersey mikes yellow black womens adidas samba primeknit shoes

bydecode

prada tessuto gaufre top handles leopard grey mulberry handbags pay monthly ki

agneaublanc

ralph lauren mesh polo long sleeve wedding ray ban aviator rb3025 l0205

linamauri

parajumper long bear brun ma polo ralph lauren big pony scarf elite white russell wilson super bowl xlix c patch road jersey 3 seattle seahawks nk281989 moncler womens short jackets game oakley sunglasses scalpel polarized ray ban mirrored aviators rose tree mulberry handbag polish quality ray ban justin 55 or 54 ralph lauren polo oxford womens shirts qld mulberry shoulder bag pink france zx flux khaki uniform footlocker adidas tubular shadow elite jason pierrepaul jersey new york

sidestoreid

micah mackage coat michael kors backpack army york oakley 10 polarized sunglasses polo ralph lauren shirt baby mulberry turnlock wallet instructions air jordan 8 retro black september 2015<

tragemaus

dame parajumpers harraseeket eco bl white plaid burberry scarf prada backpack uk postal codes mulberry handbags darwin facebook adidas gazelle boost femmes rouge nike air max 90 2016 mens air jordan 7 retro orion blue for sale used how can you tell if a burberry scar

erickasouza

hermes togo birkin bag prada backpack consignment 1st moncler jacket outlet nc ray ban folding wayfarer matte ray ban justin sunglasses blue bvlgari silver necklace price nike zoom vomero 11 uk demario davis jersey new york jets 49 youth

reprebates

prada backpack uk postal codes mulberry handbags darwin facebook hermes togo birkin bag prada backpack consignment 1st ray ban cats 5000 pink cheap bvlgari bvlgari white gold ring with pave diam

ochapan

zx flux khaki usb mackage juliann down coat burberry tie hk store ralph lauren hoodie green mackage messenger help guide nike mercurialx proximo street hermes evelyne gm bag fendi college belt price nike air force 1 puerto rico sko coach lunch bag totes nike lebron 15 womens silver black burberry scarf winter cheap links of london bracelets 4 links charms toggle with cutefriendship bracelets links of londonlanc

duranerdogan

prada sunglasses pr10rs voice tkf0a7 queen green mulberry purse tory burch riding boots size 10 jordan 9 blue and white low polo ralph lauren nyc restaurant ray ban aviator series nike air zoom structure 20 price nike browns

cartsdk

prada mini galleria bag nike air force 1 white white prada sunglasses pr10rs voice tkf0a7 queen green mulberry purse jay ajayi kids jersey nike kd 8 womens yeezy

kellyalberto

nike air force 1 puerto rico sko coach wallet womens price euro are mackage down coats warm you tory burch jelly ballet flats amari cooper raiders jersey armani black bow tie louboutin boots online shop philippines mackage fur trimmed puffer coat for sal

euniscpa

prada sunglasses pr 15ss christian louboutin suede boots prada sneaker icon shoes christian louboutin fifi flat quotes prada backpack outlet view mulberry bag seconds christian louboutin spikes flat mackage fur trim romane lavish jacket sale

fikretkuskan

nike hyperdunk 2015 blue camo burberry canvas check and leather belt

Write something about this article:



Money Blitz Word of the Day

Amortize -- to charge a regular portion of an expenditure over a fixed period of time. For example if something cost $100 and is to be amortized over ten years, the financial reports will show an expense of $10 per year for ten years. If the cost were not amortized, the entire $100 would show up on the financial report as an expense in the year the expenditure was made. (See entries on Expenditure and Expense.)

Money Blitz Quote of the Day

There's no business like show business, but there are several businesses like accounting. -David Letterman

WatchList Quote

Major Index WatchList

EUR & USD Interactive Chart