How To Set Up A Tax-Saving Bookkeeping System

 

 

One of the most important, but least understood or appreciated

aspects of any business is its bookkeeping or accounting system.

And, because very few people know much about the reasons for a

bookkeeping system, most people are frightened by the thought of

the work involved in setting up such a system, and the drudgery

of daily maintenance.

 

There's really nothing complicated to bookkeeping it's as simple

as keeping a daily dairy and' or maintaining your personal

checkbook. At the bottom line, it's simply a matter of recording

your deposits-your incoming monies-and keeping a record of the

money you spend.

 

So, the first thing you need to do is open a business account for

your extra income business or endeavors. Generally, this is

simply a matter of asking the new accounts teller at a local bank

for a business account registration fee, send it in to the

appropriate commissioner, and from there, open you a new business

account-complete with imprinted checks.

 

Drop by a local stationery store and pick up a loose leaf

notebook, and a supply of paper. We've always picked up a supply

of index tabs at the same time--either to separate the months or

the accountability sections for each item we sell.

 

Assuming that you want to make it as simple as possible, while at

the same time keeping it as efficient as is necessary-here's what

you do and how to do it.

 

On the first page in your notebook, write on the top line and in

the middle of the page: Monday, January 1st, 1983

or whatever day you officially start your business...Then, as

your orders come in, if by mail, as you open your mail-jot down

starting from the left side of the page, the amount you

received-dash-for what-from whom, and their address. The page

might look like this:

 

Monday--- January 1 1983

 

$

 14     Tapes

100     S.W Fee-Barton

 10     Hong Kong Dir #261

 10     "    "      #261

  3     Whsle Prt Dir #49 

 70     Hot Line Lst--Morgan

 

TOTAL INCOME $207         EXPENSES 0

 

That's all there is to it, and boiling it  all down, it amounts

to recording what you receive and what you spend.

The next entry, immediately under that first day's entry might

look like this:

 

$207 Deposit

 11 Printer-for copies

 10 Sec & riches thru R Est #302-Rogers( 75010)

  3 Simplified annual M.O bkkp Sys (21104)

 10 Money Magnetism-Kline (88033)

 36 R.W Fee-Magnuson (10067

  6 Manual on Bookselling-#291-Magnuson (10067

 15 display Ad- Smith 948089)

 22 Ideal Ofc Supplies-printer paper

 

TOTAL INCOME $80         Expense $33         Deposit $207

 

And then, carry on with this recording of the money you deposit,

receive and spend each day with similar entries for each day of

the week-every day Monday Thru Saturday for each week. It's

simple uncomplicated, and a positive record of your business

activity.

 

Then at the end of each month, transfer this daily information to

one of the low cost bookkeeping registers that your tax

consultant or accountant can work from. These people won't work

from your daily dairy, ad will not transfer the information you

record in it to a formal bookkeeping register without charging

you a small fortune. it's not that big of a job, ad if you do it

after te close of the business on the last day of the month, it

will take at the most a very few minutes. Then, of course, when

you're ready to do your taxes, you simply give your bookkeeping

register to whoever is going to do your taxes, and you're home

free.

 

The bookkeeping register you'll need can be any simple columnar

notebook-we use an "Ekonomik Register,Form RL-17"

available in a number of different styles and sizes from Ekonomik

Systems-PO Box 11413-Tacoma,WA 98411. All you really need is some

sort of notebook with a number of columns marked off, a title

written at the top of each column, and a record of te money

received for each day relative to the product or service each

column represents. Then at the end of each month, you can simply

add the totals from each column and you'll instantly know how

much money you took in from each of your offers.

 

Beyond te date column, will be your record of expenses or money

spent. Again, you should title each of the columns you'll be

entering figures into, and then record your expenditures for

items falling into those categories. Then at the end of each

month, it's a simple matter to add the total from each column and

know exactly where you stand relative to profit or loss-how much

you took in compared to how much you spent.

 

Bookkeeping and/or accounting is a very simple and should not

scare you. Just keep it simple, ad up-to-date.