Owning and operating your own small business requires a willingness and ability to wear multiple hats. There are always numerous things going on at once and they all require your expertise. It can quickly become overwhelming if you are not properly staffed with the right people; people you can trust. One particular department is not very forgiving when mistakes are made. It is essential that the bookkeeping department be a group of patient and detail-oriented individuals that have specialized experience in keeping track of the financial activities of your business. The team at ORT Consulting Group is equipped with all the necessary tools to keep your books in order.
Bookkeeping is the process of organizing and recording your financial transactions so you can accurately report them to the government and have better insight into your finances. This will help you make better decisions for your business. Basically, it’s keeping track of all the money that comes in and out of your business. For most new business owners, this means tracking your income and expenses. By doing so, you’ll be able to see the total you earned, the total you spent, and your net income in any given time period.
When tracking your income and expenses, you need to ensure that all transactions are labeled with the date and amount of the transaction. You will also need to keep track of the other party involved and categorize the transaction. The category of the transaction will keep similar transactions grouped together, making them easier to monitor. This way you can see that A paid B $4 for “Recreation” on November 6, 2021, by looking in your “Recreation” Category.
At the end of the day, what you need to know is what is coming in, and what is going out? When monitoring your income, you must keep track of where the money is coming from, especially when multiple categories are involved. If you know that you earn more money from A than you do from B, you can see what is fueling your business, and where your focus needs to be. The same is true for any money going out. Where is the money going? What is it being spent on? Is this cost essential to my business? By breaking things down into categories and subcategories, all of your financial information and transactions will be easy to access.