Even if you are outsourcing bookkeeping Orange County in California, it is important to know the basics of bookkeeping to know if your bookkeeper is doing his job. You don’t need to do an accounting degree. This beginner’s guide will discuss everything you need to know about bookkeeping.
Understand business accounts
An account does not refer to the bank account of an individual. An account is a record of all financial transactions such as payroll or sales. Here are some basic types of accounts: liabilities, assets, revenues, expenses and equity.
Bookkeeping starts with setting up the necessary accounts so that you can record financial transactions in the right categories. It is likely that you will not have the same accounts as the neighboring business.
Set up business accounts
Setting up your business accounts is crucial. Back then, charts of accounts used to be recorded in general ledgers. However, nowadays, businesses use computer software for bookkeeping services in Orange County California to record accounts. This is mostly a virtual record and not a hard copy. However, the overall file is still known as the general ledger.
Decide on a bookkeeping record
If you want to do your own books instead of outsourcing a bookkeeping firm, you should make a crucial choice before setting up everything. You will either use double or single-entry bookkeeping.
Record every financial transaction
You have created your own financial accounts and chosen a bookkeeping system. You should now record what is actually happening with your money. Make sure that each credit and debit transaction is recorded in the right account correctly.
Balance your books
This is the last step in basic bookkeeping Orange County in California. You should ensure that you balance and close your books. When you tally your credits and debits, the totals should match and this is what we call balanced books.
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