Question:

How do I do bookkeeping?

Up To Date

Rather than stuffing all of your business records (invoices,
receipts, statements) in a file to be sorted through at the
end of the year, be proactive. Balance your business accounts
at least monthly. Keep a ledger or log of your sales, purchases,
and misc expenditures. The more often you do it, the easier
it will get. By the end of the year, you'll be all set to
file your taxes without encountering a huge mountain of paperwork.

Taming Receipts

Does tax time make you shudder? Can't remember how much you spent or what you spent it on? Here are a few simple tips for keeping track of those business expense receipts:

*put receipts into envelopes (one envelope per month) as you receive them.
*put receipts into envelopes (one envelope per type of expense, ie: supplies, advertising)
*have a checking account or credit card just for your business and put ALL of your business transactions through it.

You will receive monthly (and sometimes annual) statements showing just who you paid and for what.
You'll have a much easier time sorting through it all at the end of the year (as well as being able to see
where you might adjust your spending).

Balancing Your Bank Statement

Begin with:
Ending Balance from Bank Statement

Add: Deposits in Transit (deposits you've made that are not yet recorded at the bank)
Subtract: Outstanding Checks (checks you've written that have not yet cleared the bank)

Computed Book Balance

Balance per Your Books (account balance per your checkbook)

Difference (should be zero)

Fly For Free

How much money do you spend on your business every year?
If you're in MLM you might actually put a lot of money "through"
your credit card as you place orders while your customers pay you
by cash or check. Why not make this money work for you?

By using an airline credit card, you may be able to get a free
flight every year! For example: If you put all of your customer's orders
on your airline credit card, and they pay you cash or check, you can build
airline miles points and pay off your card every month (thus no extra
interest expense). Most airline cards offer about 1 mileage point for
each dollar spent. With only 25,000 points, you can cash in for a free flight!

Sample Balance Sheet

ASSETS

Current Assets:
-Cash
-Accounts Receivable
-Less:
Reserve for Bad Debts
Merchandise Inventory
Prepaid Expenses
Notes Receivable
Total Current Assets

Fixed Assets:
-Vehicles
Less: Accumulated Depreciation
-Furniture and Fixtures
Less: Accumulated Depreciation
-Equipment
Less: Accumulated Depreciation
-Buildings
Less: Accumulated Depreciation
-Land
Total Fixed Assets

Other Assets:
-Goodwill
Total Other Assets

TOTAL ASSETS

~~~~~~~~~~~~~~~~~~~~~

LIABILITIES & CAPITAL

Current Liabilities:
-Accounts Payable
-Sales Taxes Payable
-Payroll Taxes Payable
-Accrued Wages Payable
-Unearned Revenues
-Short-Term Notes Payable
Total Current Liabilities

Long-Term Liabilities:
-Long-Term Notes Payable
-Mortgage Payable
Total Long-Term Liabilities

Total Liabilities

Capital:
-Owner's Equity
-Net Profit
Total Capital

TOTAL LIABILITIES & CAPITAL

Sample Balance Sheet

*CURRENT ASSETS:
Cash
Accounts Receivable
Less:
Reserve for Bad Debts
Merchandise Inventory
Prepaid Expenses
Notes Receivable
*TOTAL CURRENT ASSETS

*FIXED ASSETS:
Vehicles
Less: Accumulated Depreciation
Furniture and Fixtures
Less: Accumulated Depreciation
Equipment
Less: Accumulated Depreciation
Buildings
Less: Accumulated Depreciation
Land
*TOTAL FIXED ASSETS

**TOTAL ASSETS

*LIABILITIES & CAPITAL
Current Liabilities:
Accounts Payable
Sales Taxes Payable
Payroll Taxes Payable
Accrued Wages Payable
Unearned Revenues
Short-Term Notes Payable
Short-Term Bank Loan Payable
Total Current Liabilities

*LONG-TERM LIABILITIES
Long-Term Notes Payable
Mortgage Payable
Total Long-Term Liabilities

*TOTAL LIABILITIES

*CAPITAL:
Owner's Equity
Net Profit
*TOTAL CAPITAL

**TOTAL LIABILITIES & CAPITAL