In the old days, mom & pop shops would keep the cash in an old coffee can somewhere under the counter. Whenever they needed something, they would just take a few bucks. Savvy shops might even leave a note saying how much they took.
This is NOT the model we’re going to be using.
3 Important Reasons Why You Must Keep Records
Keeping good financial records is pretty important. Here’s why:
- Getting Paid In Full—When you’ve got a full client load, its not really possible to remember who paid what and when. When you keep track, including check or credit card number, date of payment, and how much, you’ll be able to quickly see if someone is carrying a balance.
- Taxes—The government wants their appropriate share, and they don’t really make it optional. Every business has to pay taxes, and yours will be no exception.
- You’ve Got To Pay Yourself—You’re going to be moving money from your business account into your personal account. This is called “Getting paid”. Since you’re in business for yourself, the accounting software you use will make this much easier to keep track of.
What Accounting Software You Should Use
It’s the 21st century. You’re not going to be using old-school accounting books that you write in by hand. You’ll be using high tech, yet surprisingly simple, computer software called Quick Books by Quicken. Here’s why:
- Industry Standard—Accounting is not the place to get all creative. You want to use something that has tons of support, lots of resources and tutorials, and other people, like your CPA will be using. If you’re using some crazy small time off-brand of software, you’re going to have to jump more hoops to get the information to where you need it. That means there’s more opportunity for mistakes.
- Easy To Use—Yes there’s a learning curve, just like everything else in life. But the curve is not that steep. There are quick start things to be able to jump right in get your finances in order.
- Easy To Get—You can download Quickbooks online, so you don’t even have to leave your easy chair to start to become an accounting master. (If you really do like getting in the car, wandering around stores, and fighting crowds then you can pick up Quickbooks on CD. It’s the exact same stuff, but you won’t be quite as cool.)
- Not Too Expensive—Professional tip here… A craftsman is only as good as his tools. Invest in good tools and it will make your life much easier. Quickbooks isn’t the cheapest but it’s also not the most expensive.
Which Version Of Quickbooks Do You Need
There are several different versions of Quickbooks depending upon how big your business is, number of employees, etc… If you just starting out, then either of the following versions will be just fine. (Click on the link to download from Amazon.com)
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