Bookkeeping Simplified

Business owners eventually have to
decide how they are going to handle their
bookkeeping. This has been an ongoing
quest for me.

My first experience with keeping
business books was before being

introduced to computers. As an Avon
Representative they provided forms that
helped, especially since there was some
inventory involved. When I owned a cake
decorating business I had to track
amounts received for the product, cost of
the ingredients, and try to figure the
approximate cost of intangible items

such as electricity used to run the oven!
As the owner of a residential cleaning
service and a wallpaper hanging/painting
service, bookkeeping required tracking
income, mileage, advertising costs and a
few supplies.

All the above required a ledger with
several columns, a pen or pencil, a good
ten key calculator and lots of time. With
the introduction of the personal computer
came overwhelming choices of
accounting packages and the learning
curve to go with them.

When I bought my first computer in 1994
it came with a special edition of Quicken. I
have used this program to keep track of
my personal and business checking
accounts, but it does not allow for
adequate tracking of expenses. I
considered Quicken Home and Business
when it became available, but I never got
around to purchasing the program.
When I bought my second computer it
came with an off brand accounting
program, and although I have no problem
learning software programs I never did
learn that program!

As owner of Assisting You Virtually, for
the past two years I have pondered the
choices of software programs available
for accounting/bookkeeping purposes,
and as I looked into them one question
kept coming to mind. Why do they have
to be so complicated? My needs are
simple, so why shouldn't the
bookkeeping be simple?

As I researched each package and read
about the features, it occurred to me
these programs are really geared to the
business owner who has employees,
payroll, and inventory tracking. The
accounting programs today do
simplifythese tasks, but if you are a
service business, as the majority of small
and home-based businesses are, you may
only require tracking income, simple
expenses, and minor purchases. These

e accounting/bookkeeping programs are
overkill for home-based service
businesses, especially when their costs
and learning curves are taken into
account.

The first year I kept to the tried and true
method of paper tracking and then entered
it into a Microsoft Excel spreadsheet to
automatically calculate. The second year I
tried a specially created ledger purchased
at Wal-Mart that used the double entry

method of accounting (again trying to
incorporate complicated methods when
simple could be done).

This year it finally occurred to me to
combine the simple paper method I used
with a Microsoft Excel spreadsheet and
create a template that can easily be used
year after year! It will streamline my book
keeping efforts, as I can enter the
information once and print out a summary
page at the end of the year to use in filling
out my Schedule C form.

I looked over the schedule C form and
decided what categories of expenses I
would need. Several of my expenses are
not listed on the Schedule C, so they are
itemized under 'other expenses.' Then in
Microsoft Excel, I created 13 worksheets,
one for each month of the year and one for
a yearly summary (each worksheet tab is
labeled appropriately).

On each worksheet I have columns for
each category of expenses and one for
income received for each client. The first
column is labeled 'Date' and each cell in
the column is numbered from 1-31 to
correspond to each day of any given
month. I enter the dollar amount for each
expense or payment from clients on the
date received in the appropriate column.
All expense items are entered as 'negative'
entries (or like this: -$31.00), all client
payments are entered as 'positive' entries
(or like this: $300.00).

Each worksheet has two 'Total' sections.
The first section is the last column on the
worksheet and has a formula in each cell
to calculate the totals in each row. This
'Total' keeps a running account of each
day's expenses whether negative or

positive. The second section is two rows
below the 31st day and has a formula to
calculate each column. This allows for a
running total of each category and gives
an overall total of your financial picture on
a monthly basis.

Now, the pièce de résistance, remember
that 13th worksheet? It is created similar
to the monthly worksheets. Instead of the

first column being 'Date',it is labeled
'Month' and each month is listed in the
column. Then each column of
expenses/income are 'linked' to the 'Total'
row at the bottom of the corresponding
month. When you make entries in the
monthly sheets it will automatically
update the summary worksheet for the
corresponding month! Two rows under
the month of December, there is another
row marked 'Totals' which has a formula
that calculates the totals for each column
of expenses and income. This gives you
at a glance the total expenses/income for
each month summarized for the year!

Just imagine, enter the data once and with
a click of your mouse, viewing your
monthly and year-to-date financial picture
using a program you probably already
have on your computer! And when tax
time rolls around, all you do is print off
your Yearly Summary page and enter the
corresponding data on your forms (or

in your tax preparation software when
asked for it)! What could be simpler?

If you have someone else do your taxes,
you still benefit from this simplified
bookkeeping system. You have an
organized way of giving your tax preparer
your information and they will appreciate
the simple and easy to read format.

If you consider yourself as 'spreadsheet
challenged' and don't think you can create
this wonderfully simple spreadsheet
yourself, then send me an email
requesting a FREE copy of my basic
template to have for your very own! I will
include instructions for saving to your
hard drive and tips for customizing to fit
your needs.

Of course, don't forget to save your
receipts after you make your entries. I use
file folders labeled for each month that sit
within one hanging folder labeled for the
year. Even filing does not have to be
complicated!

With a little time and effort you too can
have your bookkeeping simplified!

Ginger Derrickson - Assisting You
Virtually

Certified Professional Virtual Assistant
Administrative Solutions for Small and
Home-based Businesses.

ICQ: 4045540 Email: ginger@heroffice.com

Phone: 765-482-6418

eFax: 208-361-2278

http://assistingyouvirtually.homestead.co
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