Ask
The Small Business Professor?
Dear Professor Bruce:
I run a
small carpentry service. I’ve been keeping my records in a
shoebox and I know I should be better organized. What do
you suggest?
Answer:
Many
small business owners will need to first consider a manual
recordkeeping system. They should create a page for
recording revenues and another page for recording expenses.
Each page should have various columns to list each type of
revenue or expense. Each column on the page should be
manually totaled, and if necessary, carried forward to
another page. The totals can then be used to prepare
financial statements and tax returns.
Other
small business owners know how to operate a computer. For
some of them, a simple spreadsheet may be sufficient to
record receipts on one page and expenditures on another. In
that case the spreadsheet can be programmed to add the
columns without requiring the business owner to do that.
If you do
not own a computer, check with a friend or relative to see
if they can provide help to you.
For more
advanced users there are some reasonably priced accounting
software packages that offer simple record keeping
solutions. Quickbooks is a good place to begin your search
for accounting software. Peachtree and Microsoft offer
competing products. Each program will allow you to prepare
financial statements and other reports directly from the
data entry you provide when recording your revenues and
expenses.
Beyond
that you may want to talk to an accountant. According to Joe
Rosenberg, CPA (Florham Park, NJ), many small business
owners are challenged by the transition from the shoebox to
a computerized record keeping method. Training is essential
to understand software. Check with your local college for
continuing education classes in accounting software.
How do
you find a good accountant to assist you? Ask around for
referrals. Then make a call to the accountant and explain
that you are at the early stages of your business. Determine
the costs associated with the accountant’s services. If you
cannot afford it, you can contact the SBA, SBDC or SCORE to
see if they can help.
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