Top Three Bookkeeping Basics

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30 Bookkeeping Basics. "Pick one to begin"

Certainly there could be no harder task than to choose the single best from so many
important, yet different, bookkeeping basics. So let me help a little and pick three
business bookkeeping tips, for different reasons.

#1) Get a business federal tax identification number. Otherwise known as an EIN
(Employer Identification Number). Even if you don't have or never plan on having
employees.

Why? Quite simply, because it is a smart safety precaution!

This way you can use your EIN for all business matters instead of your individual
SSN (Social Security Number), which is something you never want to put in the
wrong hands.

You may apply for an Employer Identification Number in various ways, but I
recommend online.
This is the quickest and easiest way to go and is a free service offered by the Internal
Revenue Service (IRS).

You may also want to check with your state to see if you need a state number or
charter.

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#2) Set-up new business checking and savings accounts. (If you haven't done so
already).
People tend to underestimate how crucial this is to the foundation of their business.
But this is definitely one of the important basics of bookkeeping.

Keeping your personal finances and business bookkeeping accounts separate may
sound like more of a headache. But believe me; it will actually save you a headache.
When it comes time to gather all of your income tax information at the end of each
year, you are going to be very thankful that you had separate bookkeeping accounts
from the beginning. Plus, there are very important IRS rules against the "co-mingling
of accounts".

I signed up for my business bookkeeping accounts at a different bank than where I do
my personal finances banking. Just personal preference, but I like keeping my
interests separate from each other. You should do whatever makes you feel most
comfortable.
I do recommend that wherever you decide to do your banking, to also sign up for
online access to your accounts.

I know many people are reluctant to do online banking, but I find doing my
bookkeeping via online banking to be very convenient and safe.

Downloading transactions can save you a lot of time and energy which you can then
put toward the things you really enjoy doing with your business!

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#3) Decide on an accounting or bookkeeping software.
The last thing you want to spend your time doing is writing out your bookkeeping the
old fashioned manual way.

There really are a lot of computer software programs to choose from.
I definitely would NOT recommend MS Money for your business bookkeeping. MS
Money is great for keeping track of your personal finances, (this is what I use and DO
recommend for personal finances) just not for business.

Quicken is only recommended for either personal or small business bookkeeping. It's
oversimplified and so not very user friendly for larger business bookkeeping.

I'm sure you have all heard of QuickBooks. This is what I use and would definitely
recommend to you as well. It is easy to use and comes with many bookkeeping
tutorials built right in.

There are several different versions that are business specific. Check out the
Bookkeeping Supplies Store for a detailed list of the different software available, all
at discount prices.

				
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