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Learn the Basics of Bookkeeping

Updated: Sep 24, 2022

Learning the basics of bookkeeping can be a challenge for us Mother Entrepreneurs because we have very limited time. My goal is to help you maximize your time and understand your bookkeeping so you can do it faster!

What is Bookkeeping?

Bookkeeping is your business’s backbone. It is one of the most important parts of a business. The only way a business can be successful is if the bookkeeping is done regularly so you keep up with your financial status. Bookkeeping is the process of keeping track of the income coming in and the expenses paid.

Bookkeeping includes the following documents:

  • Invoices

  • Bills

  • Receipts

  • and so much more

Bookkeeping can be done in many different ways. Some choose to do it all manually by keeping track of it with pen and paper or in a spreadsheet like excel. Most businesses choose to use software such as QuickBooks Online for their bookkeeping. The software does save a lot of time and in my option is worth the cost. If you are not in a position in your business where you can afford to pay for bookkeeping software, Wave Apps is a great free bookkeeping software that will help you automate some of your bookkeeping tasks.

The number 1 reason QuickBooks Online is the best software, in my option, it has the capabilities to remember your frequent transactions. In Wave Apps, it doesn’t remember your transactions by the vendor so you have to spend more time categorizing every single transaction. To me, time is valuable and I am willing to pay a little fee to get a better product. QuickBooks Online also has much better reports. The report capabilities are very helpful when comparing months or even years. In Wave Apps, you would have to pull each month or year individually and then create reports manually in a program like excel or google sheets to be able to compare months or years. It is very helpful to be able to see how your business has progressed and made it through tough times. I love being able to pull reports in QuickBooks Online and help my clients see the changes over time. It is very helpful when doing a budget or looking to sell a business. The last reason I love QuickBooks Online over Wave Apps is QuickBooks Online can grow with you! It is very helpful to be able to upgrade as your business needs change. Wave Apps doesn’t have this option and if you outgrow it, you will need to switch software and will not be able to compare years as easily.

Warning about other software is some bookkeeping software doesn’t have the ability to reconcile quickly. If you are using a bookkeeping software that you can’t reconcile within the software, you need to change the bookkeeping software. I have used other accounting software such as Xero that doesn’t have reconciliation captivities and I ended up spending a lot more time reconciling outside the software. It was very tedious.

Why Bookkeeping Matters?

Bookkeeping matters because it allows you to know where you are in financial matters. If you wait until the end of the year to do your bookkeeping for taxes you have missed the opportunity to make financial decisions that affect your taxes, ability to know if you can afford to hire someone, and know how much you can pay yourself because you need to be paid too!

Bookkeeping allows you to review important reports throughout the year such as:

· Profit and Loss

· Balance Sheet

· Statement of Cash Flows

If you are regularly doing your bookkeeping, you will know if you can afford more inventory or if the inventory you have is enough to keep you running until you can get more. You will know if you can hire a new contractor to help you with your website design or if you will need to make do until you have more cash flow. Most importantly, you will be able to maximize your tax benefits. Those who do their bookkeeping regularly save more in taxes!

When to hire a bookkeeper?

It is time to hire a bookkeeper if you are too busy to keep up with your business, and personal needs to be able to do your bookkeeping regularly. Ideal bookkeeping would be done weekly, then at the very least monthly. I know some bookkeeping quarterly and am satisfied with it but I don’t suggest quarterly unless that is what you feel is best for your business.

It is best to do your bookkeeping when the transactions are fresh in your mind. If you wait until the end of the quarter or even worst, the end of the year, then you are most likely going to spend more time researching what you bought. It will also decrease your ability to make changes to your spending habits. The biggest mistake I often see is others forgetting about subscriptions. Once you no longer use a subscription, it is best to cancel it so you not get charged for something you are no longer using.

Can I do my own bookkeeping?

Yes, you can! Melanie Queen created an amazing bookkeeping coaching program to teach you how to do your own bookkeeping!

She has been helping mother entrepreneurs like yourself, learn how to do their own bookkeeping for over 6 years. She has created a simple-to-follow workbook with videos, and an easy-to-use excel sheet or Google Sheets to keep your business books. ​

She also goes over the basics of QuickBooks Online if you would rather use an amazing program for your bookkeeping.

Bookkeeping’s basic steps are: Accept transactions in your accounting software, reconcile your accounts monthly, and review reports monthly. It really is that easy! The first step is deciding when its best fits into your schedule. Learn today when it is best for you to do your bookkeeping!

Try out the first lesson for free!

What if I don’t want to do my own bookkeeping?

Learning the basics of bookkeeping can be a challenge for us Mother Entrepreneurs because of not have the time or the will to do our own bookkeeping. No worries!

Melanie Queen also offers monthly bookkeeping services! She offers a VIP Day where she takes a day and gets your books up to date then coaches you on your own bookkeeping! She also can take your bookkeeping over completely!

In monthly bookkeeping, Melanie will take your income and expenses and categorize them for you. She will then do your bank reconciliations and send you monthly reports. Then when you need your reports for taxes, business planning, buying a new house, or selling your business, your books are up to date and ready!

Schedule a free consultation with Melanie, today! To see if it is a good fit!

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