Table of Contents:
- Introduction to Bookkeeping Essentials
- What is bookkeeping?
- What are the benefits of bookkeeping?
- Bookkeeping 101 terms
- Bookkeeping Essentials Course Outline
- Who should take this Bookkeeping Essentails Course?
- What are the benefits of taking this Bookkeeping Essentials Course?
- How to gain access to the Bookkeeping Essentials course and get started?
- Final thoughts
Introduction to Bookkeeping
Bookkeeping is essential to every business. Without it, a business would not be able to know at all how they are doing. Every business needs to know how to do bookkeeping! In this post, I will walk you through why bookkeeping is important to your business, even if you are just running a side hustle. Go through some bookkeeping terms and introduce you to my free bookkeeping course- A course for anyone with a business or even anyone who wants to use bookkeeping concepts in their personal life. Whether to balance your own personal books or to put this as a skill on your resume. Truth be told, when I did bookkeeping years ago, it wasn't my favorite activity- just too many numbers but I understood that it was an essential part of any business. Some parts of it I loved more than others but I knew whether I loved it or not- it was essential or necessary.
What is bookkeeping?
Bookkeeping is the recording and analyzing of financial transactions that every business needs in order to find out how they are doing. The information is then summarized whether manually or through a bookkeeping software. Most bookkeeping is recorded in what is called double entry bookkeeping( defined below)
What are the benefits of Bookkeeping?
Organized financial records
Proper bookkeeping will keep your financial data up to date and organized at all times.
Easy access to financial information
Most bookkeeping is done through either a bookkeeping software(desktop or online) such as Sage 50 or Quickbooks allowing you to get access to your financial information whenever you need them.
Better financial management
If your books are kept correctly and up to date then you will have a better picture of how you are really doing as a business.
Better decision making
An informed decision is always the best decision and it is the same for your business. If you have a good picture of your business from your bookkeeping then you will be able to make better decisions. For example, when to buy new equipment or if you have enough cash in the bank to buy anything.
Better forecasting
If you have accurate information about how you did throughout the year, it will allow you to be able to forecast better for the upcoming year. If you don't know how you are doing on a regular and consistent basis, then you have no standard to look to for the future.
Better goal setting
Better forecasting means better goal setting. Good bookkeeping will allow you to set more goals for your business because you know where you stand. Here are 5 ways to make yourself more accountable after setting goals.
Better audit position
No business wants to be audited but if you do find yourself in an audit, with good bookkeeping it will go smoother than someone who has bad bookkeeping.
Bookkeeping essential Terms.
Here are some Bookkeeping terms that as a small business owner, you should familiarize yourself with. Let's face it- most times, you are or will be the bookkeeper for your business, so these are great to know.
Double-entry bookkeeping
This is a way of recording transactions where every business transaction is recorded in two ways- debits and credits. With this method, debits and credits must equal each other on the ledger.
Debits
An entry that records money that is coming in. Usually shown on the left side of your ledger
Credits
An entry that records all the money that is going out. Usually shown on the right side of your
Ledger
This is where all your final entries are recorded. They are usually broken down in separate accounts. This will show the balancing of your debits and credits. It must be balanced.
Assets
These are all the items owned by a company with financial value. For example, cash, office equipment,, inventory, accounts receivable and investments to name a few.
Liabilities
These are all items that a business owes. For example, accounts payable, interest payable or income tax payable.
Accounts Receivables
Money owed to a company from goods and services but not yet paid
Accounts Payables
Money that the company owes for goods and services but not yet paid
Bank reconciliation
This is a process of comparing or analyzing your bank statements against your own records. Making sure everything on the bank statements are accounted for.
Fiscal Year
This is the year in which a company operates or reports all their financials. For example, September 1- August 31st is often different from a calendar year.
Calendar year
This is a financial year that runs from January to December.
Why you should pay attention to your bookkeeping?
As I have said before, bookkeeping is essential to any business. Whether it is small or big. Keeping up with your bookkeeping can make a significant impact on your cash flow and here's why.
Invoicing
If you are not sending out invoices to your customers in a timely fashion, then you are not going to get paid. I have seen this time and time again, where a business will take over 30 days after goods or services have been rendered to invoice their customer. Your service or goods invoices to your customers should go out almost immediately after you have completed a job. Create policies and systems in place to allow you to invoice your customers fairly easily. Most accounting softwares will allow you to even convert an estimate to an invoice in the click of a button.
Accounts Receivable
Once you invoice your customers, you have to stay on top your accounts receivables. Anything over 30 days should be a huge red flag. Monitoring your accounts receivables on a regular basis and following up with customers who have not paid you is really important. When you start getting into accounts that have aged past 90 days or even 120 days and beyond then it really affects your cash flow.
Accounts Payable
On the flip side of things is accounts payable, are you managing this side to the best of your abilities? Are you paying out debt too early and not taking advantage of whatever terms you are given from your vendors? For example, if your vendor is giving you 30 days to pay your debts and you pay in 10 days. That's 20 days in which you have released cash that you can't leverage for something else. I am not saying don't pay your bills on time- absolutely do but if you pay too early or too quick, then you are giving up your cash too early.
Inventory
Having inventory on hand is great especially if you have a product that moves fast. You want to be able to get products to your customers in a timely fashion. But are you tying up your cash in too much inventory?
Overzealous growth
Growth is perfect whether it is personal or professional but are you trying to grow your business at a pace that is burning your cash or not allowing you to control where your money is going?
Introduction to my Bookkeeping Essentials Course
I spent years as a bookkeeper in the Trade Show and Events industry and I wanted to create a FREE course that would allow anyone to learn Bookkeeping Essentials. This course is FREE and is available to you after you sign up for a FREE Membership. No Gimmick! No Catch! Keep reading to get more details on how to access this FREE Bookkeeping course. Here is the bookkeeping course outline below:
Video # 1: Welcome to Bookkeeping
This video is an introduction to the bookkeeping course. Outlining what you will need to successfully complete the course.
Video # 2: What is bookkeeping?
This video goes into the technical definition of bookkeeping and why it is essential.
Video # 3: Introduction to Sage 50 Accounting Software
Learn bookkeeping by practicing on actual accounting software. Sage 50 Accounting Software dubs themselves as a "powerful accounting for small business." I used Sage 50 in my bookkeeping days and it is very easy to use. You will see!
Accounts Receivables
Video # 4: Invoicing Essentials
Learn why invoicing is so important in this video
Video # 5: Practice Invoicing- example # 1
Video # 6: Practice Invoicing- example # 2
Video # 7: Practice Invoicing- example # 3
Video # 8: Practice Invoicing- example # 4
Video # 9: Recording Customer payments
Video # 10: Recording customer payment- example # 1
Video # 11: Recording customer payment- example # 2
Video # 12: Recording customer payment- example # 3
Account Payable
Video # 13: Accounts Payable Intro
Learn why Accounts Payable is important
Video # 14: Practice accounts payable- example # 1
Video # 15: Practice accounts payable- example # 2
Video # 16: Practice accounts payable- example # 3
Video # 17: How to print cheques and pay vendors
Bank Reconciliations
Video # 18: Bank Reconciliation Intro
Learn why bank reconciliations are an important part of Bookkeeping
Video # 19: Bank reconciliation- January example
Video # 20: How to record bank fees- January example
Video # 21: How to record third party payroll- example # 1
Video # 22: How to record third party payroll- example # 2
Video# 23: How to record credit card transactions
Video # 24: Bank reconciliation- February example
Video # 25: How to record credit card transactions
Video # 26: Bank reconciliations- March example
Video # 27: How to record credit card transactions
Bank reconciliation- Practice on your own- April, May, and June
Accounting reports
Video # 28: Learn how to access important reports
Backing up Sage 50
Video # 29: Learn how to backup Sage 50
Who should take this bookkeeping essentials course?
- Someone who owns a small business or a business
- Someone wanting to add a new skill to their resume
- Someone wanting to increase their general accounting knowledge
- Someone who likes to gain new knowledge
- Someone who enjoys working with numbers
What are the benefits of taking this Bookkeeping Essentials course?
- Learn something that you can apply to your business or everyday life. As I have said before, every business needs bookkeeping. Whether it is big or small.
- Increase your sense of financial literacy in your business or personal life- debit and credits is not only for the business world. You can use it to balance your bank account or your own personal finance.
- Bookkeeping is a hard skill to go on your resume- Couple that with soft skills to gain the edge in the current competitive job market. Learn more about 5 Essential Soft Skills to have on your resume in 2024 and beyond.
- It is Free knowledge- Nothing beats free when it comes to knowledge. Most accounting and bookkeeping classes will run you hundreds or even thousands of dollars to complete. See below how to gain access to this important FREE course.
- Self-paced learning-Online bookkeeping classes allows you to learn bookkeeping at your own pace. Watch the videos and do the examples on your own schedule and in the comfort of your own home. Or anywhere you have access to a computer.
How to gain access to the course and get started?
Step 1: Click here or click the image below to sign up for a FREE membership
Step 2: Fill in your details and register for an account
Step 3: Log into your account with the details created in step 2
Step 4: Click on the Members Only Section- Business and Select the Bookkeeping Essentials Course
Step 5: Learn Bookkeeping by actually doing real examples(not just theory) and at your own pace
Step 6: Put your new Bookkeeping skills to practice in your business or put it on your resume.
Final Thoughts
Bookkeeping is not always easy or even fun sometimes but it is a necessary part of any business. Bookkeeping is essential. It can tell a story about how a business is doing in a snapshot or in a report. It allows any business to be able to plan properly and know their position at any time. In my FREE Bookkeeping essentials course, you can learn this very important part of any business. Use this skill for your own business or put it on your resume. Whatever you use it for, it will only help you gain more knowledge.
Happy number crunching Gurus! Reach out to me if you have any questions about Bookkeeping or this course.
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