How to Do Accounting for a Small Business

Small-business accounting does not have to be complicated, nor do you need to purchase expensive software if you have Microsoft Excel. You can do everything you need to do in Excel, and, further down the road if you want a software program such as QuickBooks, you can upgrade and eliminate using Excel. You will need Excel spreadsheets with sections for expenses, sales, wages and inventory.

Things You'll Need

• Microsoft Excel

Instructions

1. Set up an Excel workbook for each month by using the tabs on the bottom of the open worksheet. Select "Sheet 1," and right-click the tab. Select "Rename," and enter "Sales." Enter a name for each sheet until you have enough sheets for your accounting records. To insert another sheet, right-click on the last sheet and click "Insert." Another window will open. Select "Add Worksheet."

2. Save this workbook and name it according to month and year. You are ready to start entering information and formatting.

3. Start in Column B and proceed to each column entering the day. For example, B will be 1 and C will be 2 and continue. In Column A, you enter sales by name or all sales as one. For instance, a bar may have beer sales, pizza sales, soda sales and mixed drink sales. Enter "Beer Sales" on Row 2 and "Pizza Sales" on Row 3 and continue.

4. Start entering your sales as needed. Format the rows and columns to total as you make entries by using the AutoSum icon (looks like the letter E) from the toolbar. Do each row across until you reach the end of the month. Do each column until you reach the end of the sales. Note: To use AutoSum, highlight the row or column until the end of the entries and click on the AutoSum icon.

5. Name the next sheet "Expenses," and format it similar to the Sales sheet. Label the columns as days of the month and the rows as each types of expenses. Use the AutoSum icon to calculate totals as you make entries as you did in the Sales worksheet. Note: Look at an IRS Schedule C form, and label your rows to fit the schedule to make end-of-the-year entries on the form easier. For example, electric, gas and water can be called "Utilities." Seller's license, liquor license and other licenses can be labeled "Licenses."

6. Make the next sheet for inventory control. You can label each column as a day. Use the rows for entering the name of the item. Row 2 will be labeled "Starting Inventory." Each day, you will enter a number on Row 2 of the current day. Format the columns with the AutoSum icon so that you will be able to add and subtract inventory. Enter positive numbers like this -- 120 -- and negative amounts like this -- (120). This will allow the sheet to add and subtract as you order more inventory and sell inventory.

7. Set up a separate workbook for wages and save it as "2009 Wages." Use the tabs at the bottom of the page to name each employee. For instance, put Employee A on one tab and Employee B on the second tab; continue renaming the tabs for each employee.

8. Enter the person's name, address, city, state and ZIP code on Row 1, and use each column for enter this personal information. For instance, name in column A, address in column B and continue. Enter the Social Security number and a clock number after the personal information. In the last column, enter withholding number from the W-4.

9. Move down to Row 3 to start entering months in each column. Start with Column B, enter January, and skip five columns and continue to label each column and skip five until you reach December. For instance, Column B will be January, Columns C, D, E, F and G will be empty, and then February will be entered into Column H.

10. Enter Gross, Federal, State, Social Security, Medicare and Net on Row 5 in Columns B, C, D, E, F and G. Continue this for every month.

11. Enter the first pay date on Row 7 in Column A. Enter the gross in Column B, federal in Column C and continue. Then format the year to date in each column. Use the AutoSum icon in each column for gross, federal, state, Social Security, Medicare and net.

Tips & Warnings

• This takes time to set up but works very well for keeping your accounting records.