image credit: anna betts

Great news, bakers! Holly Neitzel, an accounting goddess and Accounting SPOT writer is joining us today to share some helpful techniques to learning the ropes of accounting. I can’t wait to use these tips for myself, as I’m one of those horrible business owners that doesn’t have an accountant. Eek!
Introducing, Holly’s 10 Tips to DIY Accounting for Indie Business!:

1) Know the very basic.
It might go without saying…but then again it might not.
Income – Expenses = Profit

2) Separate your business funds from your personal funds.
Bank, PayPal & credit cards. The books are SO much easier to balance when there are only related transactions to deal with.

3) Downloading detail is your friend.
Etsy, PayPal and probably your bank and credit cards have the option to download transaction detail in to excel and/or QuickBooks. USE THIS OPTION! The less data entry you have to do, the more time and accuracy you gain.

4) Keep your paper (and computer files) organized.
You don’t need to enter your transactions in to an accounting program daily. But, if you keep all the information organized in between entry points, entry will go much smoother.

5) Accounting software: Start simple…& free.
Start with the free versions and work your way up as your business grows. Some of the options I endorse (and work closely with, so feel free to contact me if you have questions):
Spreadsheets HERE
QuickBooks HERE
Outright HERE

6) Use the Schedule C as a guide for your expense categories.
It is not the end-all, be-all of expense categories, but it is a great starting point. Use these categories and then add in your own subcategories as necessary for your business. View HERE

7) Reconcile your accounts.
Doing this assures you know what is coming and going from your bank/PayPal accounts.

Don’t do your bookkeeping FOR the IRS.
Many owners do their bookkeeping ‘for’ the tax man. This is backwards. You do your bookkeeping for YOU and as a result, can easily share the required info with the tax man.

9) When in doubt, research the answer.
Just be sure you are using a reliable resource when doing your research. Some that I use often are:
The QuickBooks Community Forum (answers to many questions beyond just QB) HERE
The Small Business Administration HERE
Business.Gov HERE

10) Review and use.
After taking the time to create accurate financial reports, be sure to USE them! Financial reports are the basis of sound business decisions. Knowing the health of your business allows you to make good choices for your business’ future.