New small business owners have a steep learning curve in the areas of sales, taxes, incorporating an LLC, and other business-related tasks. One of the chief aspects of owning a business you should try to get right early in your journey of owning a small business is bookkeeping. Proper bookkeeping ensures that you can handle anything from a tax audit to scaling your business to applying for grants or loans to invest in your business, so you should follow the advice of seasoned business owners. According to the video “The BOOKKEEPING BASICS for BEGINNERS,” every small business owner should know what bookkeeping is, why it’s important, and how to do it in several essential steps or at least hire a bookkeeping service if it’s too complicated.
A bookkeeping service would first compile and categorize financial information. Once that step’s done, you can file it in a digital accounting system like Quickbooks or an analog one if you’re traditional.
To get started, you must gather all of your financial documents such as invoices, receipts, sales orders, and other source documents that recorded transactions. After that, you’ll need to sort your records into categories. Next, you need to reconcile transactions. Next, go over your work to ensure that every transaction is documented. Finally, you should review your financial statements.