Please forward this error screen to 89. When readers buy products and services discussed on our site, we often earn affiliate commissions that support our work. Regardless of whether you hire someone to do your small business bookkeeping or not, you need to have a good bookkeeping system in place, understand how it works, and track some of your day to day business activities. We the ultimate guide to starting an online business pdf this guide to provide you with some basic instructions on how to set up a bookkeeping system that will fit most small businesses.
Still deciding on which bookkeeping software to use? In this section, we will provide the framework for understanding each of these things and later in the guide, we’ll show you how to track them in detail. Every business generates sales by offering a service like catering or selling a product like clothing. The primary difference between the two is based on when you receive payment from your customer. For example, let’s say a customer comes into your store to purchase a pair of jeans. The customer pays you for the jeans and leaves the store. This is considered a cash sale because both the sale and the payment occurred at the same time, regardless of whether the customer paid with cash, credit card, or debit card.
A credit sale is one where some time passes between when you make the sale and when you receive payment from your customer. For example, let’s say a therapist had a 1 hour session with a customer and will send them a bill for the session. The therapist has provided the services and expects to be paid within the payment terms they have extended to their customer. This is where you need a good bookkeeping system in place to help you track how much your customers owe you and when it is due. We’ll show you how to track all of this later in this guide. As the old adage goes, you’ve got to spend money to make money. With that said, every business generates a variety of expenses.