Business Advisors Talking Over Charts
06-May-2021 By - team

The experience of keeping the books for the first time does not have to be one that is fraught with anxiety. This piece on my blog will assist you in getting started with bookkeeping by presenting you with six key concepts that are not only important but also extremely useful. These suggestions cover everything from how you can fill in your records to easily accessible bookkeeping techniques that you should be familiar with, in addition to some helpful recommendations for studying bookkeeping in the comfort of your own home.

You don't happen to hold a certificate in bookkeeping or a degree in accounting, do you? Not a problem. The following is a rundown of the essential concepts that you need to become familiar with in order to start keeping the books like a professional as soon as feasible.

Bookkeeping is the process of recording all financial transactions made by a business. Bookkeepers are responsible for recording, classifying, and organizing every financial transaction that is made through the course of business operations.

How to start a bookkeeping business in 8 steps
  1. Pick your market and niche. ...
  2. Write a business plan. ...
  3. Register your business and get insured. ...
  4. Choose your bookkeeping software. ...
  5. Set up your business infrastructure. ...
  6. Price your services. ...
  7. Find your customers. ...
  8. Understand your funding options.

Bookkeeping is something that you either have to learn or outsource when you're running a business. Luckily, it's possible to learn how to manage your own books and there are a few notable benefits to tackling it yourself.

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Where Do I Begin?

Where do I even begin? To get you off to a good start as a newbie, you first need to understand how you will finish your records. There are typically three alternatives that are quite popular:

  • Spreadsheets: They have the potential to operate as a concrete starting point that will get you up and running. Even if they are suitable for less substantial businesses, you may find that it becomes increasingly difficult to maintain them as your company grows larger. This is true even if they are suitable for smaller businesses. Additionally, there is a possibility that the rate of human error will increase.
  • A Book of Accounting: A simple accounting book can be all that’s needed if all you’re doing is keeping track of a few essential records in the accounting system.
  • Bookkeeping Software: Either a desktop accounting programme or a mobile accounting app must be used to maintain your books and records. Find a system that removes the guesswork associated with bookkeeping by giving jargon that is simple to comprehend as well as the fundamental functions that you will require. You will find that carrying out the process is simplified as a result of this.

Accountant vs. Bookkeeper vs. DIY

As previously said, keeping the accounts and handling the accounting don’t require specific degrees or credentials. Nevertheless, the following are the primary choices that may be made.

Basic Bookkeeping Types You Should Know

The first step in being comfortable with bookkeeping is to do some studying, but the time spent on this preparation will pay off in the long run by making the procedure significantly less complex. You should be familiar with the following list of the most fundamental parts of bookkeeping, which we have supplied for your convenience below.

  • Cash is the account through which all transactions in a firm are processed. Because this is such an important account, bookkeepers will frequently utilise two different journals to keep track of the activity: cash receipts and cash disbursements.
  • Receivables are created when a company sells goods or services but waits to collect payment right away. This creates an account receivable for the company. This account keeps track of the money that is owed to the business from its customers. This has to be maintained up to date so that you may issue correct and timely invoices.
  • The inventory account is where you keep track of all the items you currently have available for purchase. It is important to verify the accuracy of the numbers that are recorded in your records by carrying out actual counts of the stock that is currently available.
  • Accounts Payable is the statement that shows what money is leaving or has left the firm as well as when it happened. You will have a crystal clear perspective of everything that has to be paid, and this account will ensure that you do not pay the same person again.
  • Loans Payable is the account that monitors and details everything that you still owe and the dates on which payments are due for any and all loans you have taken out.
  • Sales is the account name where you keep track of all the money that comes in from your various sales transactions. Another essential account, this one ensures that you are always aware of the status of your company by requiring timely and precise recording of sales.
  • Purchases is the name of the account that you use to keep track of any supplies or products that you have acquired for your company. This is an essential part of the calculation for Costs of Goods Sold, which must be subtracted from Sales to arrive at the total gross profit for your company.
  • Payroll Expenses is the account in which you keep track of the wages and salaries that you pay to your employees. This is often the expense that accounts for the most significant proportion of the total for many companies. Maintaining accuracy in this regard is necessary in order to fulfil statutory and other reporting obligations.
  • Retained Earnings:This account is designed to keep track of any of your company’s profits that are instead put back into the running of the business rather than being given to the owners of the company. Because these earnings are preserved and added up throughout time, they are shown as a running total of the money that has been held by the company ever since it was founded. This total is reflected in the income statement. It is an efficient strategy for tracking the development of your firm over the course of a certain amount of time.

Simple But Crucial Bookkeeping Procedures You Must Employ

It’s possible that those who are just beginning out will find bookkeeping to be scary, but that doesn’t have to be the case. You’ll be off to a solid start with your bookkeeping if you follow these easy-to-understand but critically important practises.

  • Don’t Put It Off Until the Last Minute: When setting reminders, keep important dates and deadlines in mind. This will prevent you from having to finish the books the night before. Start sooner to reduce the likelihood of making errors and the amount of time spent hunting for important information.
  • Maintain Order and Cleanliness in Your Records: It will be a living hell to do the books if the records are disorganised and filled with countless scraps of paper since crucial information will be scattered everywhere. Maintain their order so that you always know where to seek for what you need without wasting any time.
  • Keep a Record of Your Receipts: If you choose to store receipts digitally rather than physically, you will finally be able to realise the paperless office environment that you have been working for. Everything is in one place, and if there is ever a question, all of the information linked to expenses will be available inside your programme or app via attachments, regardless of whether the question is asked now or at some point in the future. The fact is that this is the case notwithstanding the fact that there may or may not ever be an investigation. As a result, you won’t ever have to worry about compliance issues again.
  • Maintain a Wall Between Your Personal and Business Funds If you want to finish the books considerably more quickly, you might consider maintaining a wall between your personal and business finances. Therefore, you won’t have to rummage through your personal information in order to get the financial information you need for the business and vice versa.

The Essential Bookkeeping Terminology

When moving from balance sheets to income statements, you will, without a shadow of a doubt, get familiar with a variety of new terminology and phrases. Once the meanings of the words are reduced to their most fundamental components, they may be comprehended with relative ease in practice.

Here are five of the most common bookkeeping words that you should be familiar with. Unfortunately, we cannot provide all of the terminologies used in this article.

  • A report laying down your company’s financial status is referred to as a balance sheet. It takes into account the company’s assets as well as its obligations and its capital. It is designed to assist in demonstrating what debts and assets are owed by your company.
  • A detailed listing of the accounts that are utilised in your company to classify different types of financial transactions is called a chart of accounts. This may comprise equity, income, assets, and liabilities, among other potential categories.
  • Expenses are any expenditures, whether fixed, variable, accruing, or day-to-day in nature that are incurred directly from a company’s activities.
  • A trial balance is a document used in business that compiles the information from all of the ledgers into separate debit and credit columns. This is done to ensure that a company’s accounting method is sound from a mathematical perspective.
  • A financial report is a profit and loss statement which details the amount of money made and spent over a specified period.

This only scratches the surface of the problem. A wealth of additional vocabulary and idioms will be useful to you as you get started. Bookmarking this bookkeeping terms glossary, which will be updated on a regular basis, will be beneficial to you since there will be no confusing jargon included.

Practical Advice for Studying Bookkeeping at Home

Even if you have never worked in this industry before, you do not have to go for a book-keeper who has the most affordable prices in the neighbourhood while you are just getting started. After putting in a lot of work to earn your money, the last thing you want to do is hand over a sizeable portion of it to the government in the form of taxes, followed by handing over another sizeable portion to a book-keeper for responsibilities that you are capable of performing on your own. This is the last thing you want to do, and it is the last thing you want to do.

  • To get you started, here are some helpful hints that you may use to study bookkeeping from the comfort of your own home.
  • Acquaint yourself with the following bookkeeping terms and phrases: Do you remember the glossary that we instructed you to save as a bookmark? This moment is perfect for taking a seat, reading, and gaining an understanding of the concepts and phrases. You will have a better notion of what to anticipate and what things signify in bookkeeping as a result of reading this.
  • Carry Out Your Investigations: Use Google to search for internet resources, and when you locate valuable blogs that are constantly updated, you will always be up to speed.
  • Use a Bookkeeping App: The most effective method for mastering bookkeeping is to practise the skill on your own time and in your own environment while employing a programme that is not only straightforward but also simple to grasp. No official degrees, no certifications. It would help if you searched for one with useful features that you will require rather than a plethora of functions that you are unlikely to ever use.

All of these locations are fantastic options for somebody who is just getting started. In spite of the fact that it can appear simple on paper, you need to be able to recognise when the problem has grown to the point that it can no longer be controlled. In the event that something similar takes place, you need to be able to determine when it is the appropriate time to get assistance from a professional who can guide you through the situation.

It is likely time for you to make the process even more manageable by making use of your very own checklist now that you have access to a wealth of helpful material that will assist you in getting started as a beginner. Now that you have this access, it is time for you to make the most of the opportunities that you have been presented with in order to maximise your chances of success.

Keeping accurate books requires using a bookkeeping checklist in the proper manner.

There is more to learn about handling things as you go along than can be included in the items we have discussed so far, but they are all excellent fundamental techniques to get you started.


What the Dictionaries Say


“the ability or vocation of maintaining accurate records of commercial transactions,” according to the dictionary, is what accounting is described as.

Recording and organising financial information is the essence of accounting in its most basic form.


According to the definition provided by the dictionary, accounting is “the ability or practice of managing and auditing accounts and creating reports on the assets, liabilities, and other aspects of a business.”

What is Bookkeeping?

A bookkeeper is a person who will record the financial information of a company in an exact manner. This individual will be responsible for keeping the books of the company. The primary goal is to check the correctness of each entry on a daily basis while simultaneously keeping a track of all the transactions that take place in the books. This will ensure that the books are accurate.

A bookkeeper is able to record and compute revenue and costs, execute bank transactions, generate sales invoices and buy invoices, and create sales invoices and purchase invoices by doing this.

We have gone to great lengths to ensure that everything is explained using language that can be understood with relative ease. However, if there is any phrase that you are even slightly confused of and require a quick clarification, then head over to this glossary site and bookmark it. We are always adding new bookkeeping and accounting terminology to this site, so be sure to check back often.

Bookkeepers are also responsible for ensuring that the company’s books are balanced. They can explain vital financial information to business owners and make these reports make sense depending on the information provided.

Other tasks of bookkeepers include creating and maintaining daybooks, analysis reports, debtor reports, and other report forms, as well as providing information in report formats.

What exactly is accounting, then?

On the other hand, the primary responsibility of accounts is to ensure that general accounting procedures are followed and to produce financial statements and tax returns that are in accordance with applicable regulations.

Two parts of an accountant’s job that require in-depth knowledge of the appropriate legislation and concerns connected to the financial business are being able to understand data and providing financial recommendations that could have an influence on a firm.

There are a few various categories of accountants, the most frequent of which are those who work for public accounting firms and handle a number of different companies and those who specialise in just one. Other types of accountants include tax accountants, forensic accountants, and auditors. An accountant will evaluate the entries that were made by bookkeepers at the conclusion of each financial period and make any necessary revisions. They accomplish this by being ready to modify the journal entries and creating documents such as reports on profit and loss and balance sheets.

Having evaluated the facts, accountants assist organisations in arriving at well-informed judgments.

What Typical Bookkeeping and Accounting Roles Include

Although we cannot speak for every bookkeeper or accountant on the earth, there are some basic responsibilities that each function does, which differentiates them from one another.

However, it is essential to be aware that some of the responsibilities of bookkeepers and accountants might differ from one company to the next. There is occasionally a little overlap between the duties of a bookkeeper and an accountant, and this is especially true in smaller businesses.

Normal Bookkeeping Tasks

  • The processing of payroll and the maintenance of a payroll system
  • Taking care of billing matters
  • They are working on the first set of financial statements right now.
  • Processing incoming cash, outgoing payments, and various types of financial dealings.
  • Keeping track of financial dealings and transactions.
  • Handling both receivable and payable accounts requires management.
  • Processing reimbursement requests for expenses
  • Filing and document management.
  • They are following up with clients to collect payments.
  • Posting journal entries.
  • We are working on putting together and filing our VAT returns.
  • We are offering crucial advice on taxes.

Regular Accounting Tasks

  • I am going to make some changes to the entries.
  • We are working on putting up financial accounts and reports right now.
  • Currently, I am working on my income tax returns.
  • Strategy and analysis of the financial situation
  • Strategy and planning with regard to taxes.
  • Forecasting of the economy’s finances
  • We are arranging budgets.
  • I am analysing the performance of the business.
  • Auditing advice regarding financial management.
  • Create a business strategy as well as a prediction of your financial flow.

The functions of accountants and bookkeepers shift significantly from one company to the next. However, you are aware now that despite the fact that the two are frequently confused with one another, they are, in fact, quite distinct.

When you use digital software, bookkeeping is not nearly as complicated as it may seem, despite the fact that it may give the impression that it is. When the deadline for Making Tax Digital arrives, this is something that you will probably not be able to get out of, no of how hard you try. However, there is software available that may make managing your books more more straightforward than it has ever been before, allowing you to avoid the headache of endless paperwork.

Take the Next Step to Prepare for the Digitalization of Taxes

It is perfectly natural to be interested in Making Tax Digital and have many of questions regarding this topic. Even though the government has implemented it with the express purpose of making things a great deal simpler for you, there is still much more information you need to learn.


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