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- Bookkeeping
- Tracks income and expenses.
- Tools: Manual ledgers, Excel, or accounting software.
- Frequency: Daily/weekly updates.
- Chart of Accounts
- A categorized list of all accounts used in your business: assets, liabilities, income, expenses, and equity.
- Financial Statements
- Profit & Loss Statement (P&L): Shows revenue, costs, and profits over time.
- Balance Sheet: Snapshot of assets, liabilities, and equity at a specific point.
- Cash Flow Statement: Details cash inflows and outflows.
- Tax Preparation
- Ensure accurate record-keeping for deductions.
- Depending on your business structure, you may file different forms (e.g., Schedule C, 1120, 1065).
- Payroll Accounting
- Tracks employee wages, deductions, and employer contributions.
- Tools like Gusto or QuickBooks Payroll can help.
- Accounts Receivable & Payable
- Receivable: Money owed to you.
- Payable: Bills and money you owe to others.
🧰 Popular Accounting Tools for Small Businesses
- QuickBooks Online (most popular)
- Xero
- FreshBooks (great for freelancers)
- Wave (free option for small businesses)
- Zoho Books
✅ Tips for Effective Accounting
- Separate personal and business finances.
- Keep receipts and digitize them.
- Automate recurring expenses and income tracking.
- Reconcile bank accounts monthly.
- Consult an accountant for taxes and compliance.
