Free Small Business Bookkeeping Templates

This simple but comprehensive template allows you to create a 12-month cash flow forecast for your small business. The spreadsheet includes monthly columns for recording forecasted and actual cash flow. List cash receipts and cash paid out to view your projected and actual cash position for each month. Track the value of your current inventory and sole proprietorship bookkeeping determine the cost of goods sold with this inventory tracking template. List physical inventory by item number, name, description, type, and location, and record purchases, including purchase dates, vendors, and prices. Compare the number of items sold to your monthly sales figures to make sure your inventory tracking sheet matches actual sales.

While not mandatory, hiring an accountant can prove beneficial, especially when dealing with complex financial situations or preparing tax returns. However, for simpler operations, a sole proprietor may be able to manage accounting tasks independently. In managing the financial aspects of a sole proprietorship, one must answer several key questions effectively. To assist in this important task, here is a compiled list of frequently asked questions covering the essentials of sole proprietorship bookkeeping.

Choosing a Bookkeeping Method

It is the process of measuring, processing, and communicating financial information. Accounting provides the business owner with information about the company’s resources, finances, and the results the business achieves through its use. Most businesses use the double-entry bookkeeping system in which every entry to an account requires a corresponding and opposite entry to a different account. One of the important habits you should develop when you start a business is recording transactions in your general ledger. When you first start a small business, you will hear the terms bookkeeping and accounting used almost interchangeably.

One of the big advantages to starting out on the right foot this way is it makes financial reporting easier down the road. Using double entry systems lets a small business generate cash flows, detailed income statements and balance sheets. Combined with the right software, you’ll be able to get a hold of these reports any time. If you’re looking for the most fully featured accounting software, Wave Accounting is a good bet.

Where Do You Show Business Income Lost on a Schedule C?

Incorporating double entry accounting into modern accounting software empowers small business owners with efficient bookkeeping, accurate reporting, and a streamlined financial foundation. The advent of accounting software significantly lessened the tediousness of bookkeeping by handling debits and credits for you in the background. And technologies like optical character recognition (OCR) and bank feeds have come just short of fully automating the traditional bookkeeping process. Data entry can now happen as soon as you snap a photo of a receipt with your smartphone.

Depending on your business and local regulations, you may need to apply for a permit or license with your city, county, or state. If you plan to hire employees, you will need an employee identification number from the IRS. If you are going to sell taxable products, you will need to register with your state for a sales tax license. With Wave’s free accounting software, you can send invoices, scan receipts, and accept online payments. And unlike FreshBooks and Xero, Wave doesn’t limit your invoices, bill payments, or customers.