How to Learn the Basics of Accounting

Many small businesses don't have that in-house financial team to monitor the books for them. So whether you're a self-employed business person or the leader of a small company, you'll want to learn some sound accounting basics to ensure that the money flowing in is flowing smoothly.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Computer with Internet connection

1. Find a billing system. There are plenty of online systems where you do your work on a Web-based platform. And many offer free previews to lure you in. Of course, my accountant encourages me each year to use QuickBooks, a computer system. Whether it's the Web or on your computer, you'll need a system. Self-employed starters may choose to do their first year in a simple program such as Excel. Things don't have to be fancy; you just need to keep track of things.
2. Keep business separate. You may be tempted to use your personal account for business expenses. This is a little debatable, but it is more favorable to have a separate account for business expenses. Talk it over with your accountant.
3. Get an accountant! Yes, even if you monitor your billing and all that yourself, you still need the expert wisdom of an accountant. And they're not all that expensive. Shop around your local area, or even rely on the Web to find someone you're comfortable with.
   
   The accountant can help you set up accounting systems tailored to your business needs and give you tips to maximize your return.
4. Save receipts. I'll never forget the first accountant I had. She told me the most valuable thing (I'm self-employed, so I owe the government money) when she said, "Deduct, deduct, deduct." So I keep receipts for everything, so long as its related to my business. You'll even want to hold on to statements from your healthcare provider if you're self-employed. Small businesses should save all records of spending--these are valuable deductions!

Tips & Warnings

• Consult an accountant.
• Read up on accounting basics online.
• Shop around for a good billing system and use it.
• Businesses should never attempt to do their taxes themselves!