Step 1: Decide on Bookkeeping Software
Most small business owners don’t understand two-sided accounting. They don’t know that debits have to equal credits and that assets equals liabilities plus equity. Also, the biggest thing they need to realize is that doing your books two minutes every day is a lot easier than doing it for four hours once a month.
For these reasons, I advise my clients to use QuickBooks. It’s relatively inexpensive and once it’s set up correctly, it’s easy to maintain. If you are intimidated, a Quickbooks Pro Advisor can help you set it up and then maintain it going forward. But whether you set it up yourself or hire someone, learn your numbers. After your customers, your financial situation is the most important thing to staying in business. A recent study of business failures by U.S. Bank showed that 82 percent of businesses failed because of poor cash-flow management or poor understanding of cash flow.