What is Bookkeeping?
I hear people say they're afraid of their bookkeeping and finances and that makes me sad.
With the right knowledge, understanding your books and finances can make a huge difference in how you do business and help you make more informed money decisions.
But if I'm being honest, there was a time, just a few years ago, that I didn't have a clue what bookkeeping was either.
I didn't care what its advantages were. Hell, I wouldn't have cared even if someone told me it would make me more money.
All I cared about was the fact that it was confusing and everywhere I turned for answers I found boring ass answers with explanations that didn't make much sense.
I don't want you to suffer that same fate, so here goes...my simplest explanation of what bookkeeping is.
Bookkeeping is simply recording money as it moves in and out of your business.
Think of it like your bank statements. They show money that moved in and out of your bank account.
The difference here is that your books might include multiple bank accounts and even cash transactions that aren't on a statement anywhere else.
Your books also take the record keeping one step further.
As you put each transaction into your books, you also categorize it.
You can think of this like a file cabinet. So for instance if you paid your phone bill, that transaction would go in the Phone & Internet "file" or account as they're called.
Bookkeeping also comprises of organizing receipts, paying bills, invoicing clients, pulling reports, and inventory management in certain businesses.
People think of bookkeeping as this big scary monster, but it doesn't have to be.
You have options. You can hire a bookkeeper or learn to DIY with help. For most service based online businesses it really is quite simple.