Accounting Basics Tutorial For Small Business


Hi, my name is Aurora, and I’m here at Patriot Software to tell you what accounting basics small business owners should know. We get it, you’re a small business owner, not an accountant. But as the owner, you’re in charge of making sure your books are in order. So where can you start? Begin using a cash basis accounting system. It’s simple accounting: cash in, cash out. you record transactions as the money changes hands. Now, what should you record? Record all incoming and outgoing transactions. The more in-depth your records are, the better. Your incoming transactions will include: what you sold, who you sold it to, how much revenue you collected, the date you received payment, and if applicable, how much sales tax you collected. Your outgoing transactions will include: the taxes you paid, the employees you paid, and your business overhead costs like office supplies and rent. Keep track of every dollar that goes in and out of your company. Many payments you make may be deductible based on your income or business structure. Next, how do you record these transactions? You should place every dollar you collect on its own separate line. Do the same thing for every expense. Record where the money went, or where it came from. Do this so you know which payments qualify for tax breaks, and how much of each payment you receive goes to taxes. You should also consider organizing each transaction into a chart of accounts, separating your asset accounts, like checking accounts and savings accounts, expense accounts, such as insurance, payroll, and rent, income accounts, like money made from products and services. Doing this will not just help make filing taxes easier, but it will also help you understand your business’s cash flow. Thanks for watching, for more accounting tips and training, subscribe to our channel, and follow our blog. More helpful links and information are in the description below. You can also visit us at patriotsoftware.com and sign up for a free, thirty day trial of our fast, easy, and affordable accounting software.

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