Home Business Accounting Software

Getting Organised In the Finance Department

Home business accounting software is only part of the equation when carrying out your bookkeeping from home. You need to have a basic accounting system set-up before you start trading.

Bookkeeping/accounting is a whole book in itself, but here we shall discuss the basics of small business accounting and if home accounting software should be used.

The most basic of bookkeeping is mainly keeping track of your income and expenditure. If you can't afford home office accounting software, then at this stage you certainly don't need it.

When I first started running a home based business, I started my bookkeeping using an excel spreadsheet. That is really all you need when you are first starting out.

The excel spreadsheet was the advice from my accountant too. This was his advice to me:

Advice From My Accountant:-

In excel, have two columns, one for Income and one for Expenditure.

Each time you spend money put this in your expenditure column. You can put the date, how much and what it was in too.

Each time you make a sale or receive any kind of income, put this in your Income column. The date, how much and what it was would be handy information too.

If you can do basic formula in excel, then have a 'Total' at the end of each column so it automatically adds up each time you input any data.

Put a formula in from each 'Total' column so that the expenditure 'Total' is subtracted from the income 'Total'.

Keep all your receipts. Have brown A4 envelopes each one marked by Month. So you have 12 envelopes January, February etc..

Don't forget to put receipts in for gas, electricity, telephone, etc. These are for tax deductions for working from home.

When your tax return is due, all you have to do is print-off your spreadsheet and hand it over to your accountant/bookkeeper with all the envelopes with receipts in.

Your accountant can then do their job easily and efficiently as they have all the information to hand.

So that sounds pretty painless doesn't it? Try this first, and when your business grows and your finance starts getting a bit more detailed, then it is advisable to get some home business accounting software then.

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