Introduction – Bookkeeping and the art of knowing!
Running a successful small business
If you have recently begun the journey of being a small business owner, trust me when I say that one of the first “must do’s” is to set up an accounting system to track your financial activities. I have seen countless times where new entrepreneurs are scrambling to have their income tax filing extended because the bookkeeping and financial reports are not ready. One solution to avoid this stressful situation is to start on the bookkeeping task management journey from the beginning.
The other “must-do” for the new small business operator is to separate the business finances from the owners’ personal finances. Having a separate checking account and credit card, if used, up front will save a lot of bookkeeping headaches down the road. Again, trust me when I say, separate your finances. There are ways to add “Owner Equity” from personal accounts and do it the right way. Otherwise separating the grocery bill from the business expense can become a nightmare.
The Solution – Accounting Software
Along comes accounting software to the rescue. You have probably heard about QuickBooks and maybe Xero accounting platforms. In this article, I will talk about setting up your QuickBooks Online Company File with ease. With QuickBooks Online, you can easily manage your business finances and streamline the bookkeeping process. Remember, keeping the company financial record up to date and ready is beneficial to running a successful small business operation.
Understanding the Setup Process
During the setup process, you will need to gather and organize all the required information for your business, such as your company name, address, and contact information. This will ensure that your company file is accurate and reflects your business details correctly.
Creating a new company file is the next step in the setup process. This involves setting up your business in QuickBooks Online and entering all the necessary information, such as your business type and industry. It is important to take your time during this step to ensure accuracy and avoid any future issues with your bookkeeping.
Once your company file is created, you will need to enter your company information, such as your fiscal year and tax information. This will help QuickBooks Online generate accurate financial reports and assist with tax preparation.
Setting up your chart of accounts is another crucial step in the setup process. Your chart of accounts is a list of all the accounts that you will use to track your business financial transactions. This step is essential for accurate bookkeeping and financial reporting. You will appreciate having an accurate picture of your revenue, your costs, and your expenses to watch your bottom line – the company’s Net Income.
Allowance for Customization
Customizing preferences and settings in QuickBooks Online allows you to tailor the software to meet your specific business needs. This includes setting up your reporting preferences, invoice templates, and payment methods. Customizing these preferences will help streamline your bookkeeping process and improve the efficiency of your small business operations.
Adding users and user permissions is an important step to consider if you have employees or other individuals who will need access to your QuickBooks Online account. Setting up appropriate user permissions will ensure that only authorized individuals can access and make changes to your company file, maintaining the security and integrity of your small business bookkeeping.
Connecting your bank accounts and credit cards to QuickBooks Online is a time-saving feature that allows you to automatically import your financial transactions into the software. This streamlines the bookkeeping process and reduces the risk of manual data entry errors. It is important to ensure that your accounts are accurately connected to QuickBooks Online for seamless integration.
In part 2 next week, we will look at what information you will need to gather, how to create a new company file, how to enter the company information, and more. If you would like to take a sneak peak at one of QuickBooks Online features, read this article about The Product and Services List.
If you want to get some help getting going with your company accounting tasks, click here to send us a note and we will can meet to go over our services. We love helping our small business clients succeed!