Accounting is one of those topics that makes people nervous, but keeping books doesn't need to be complicated. In fact, simplicity is the key to a good system for small businesses. Keep in mind that your records need to be complete so you have the information you need for business decisions and taxes.

There are two basic bookkeeping methods: single entry and double entry. Single entry is simpler with only one entry per transaction. Most small businesses can operate adequately with this system. Double entry requires two entries per transaction which provides cross checks and decreases errors.

There are two main methods of keeping track of the money coming in and going out of your business: cash and accrual. Most small businesses use the cash method, in which income is reported in the year it is received and expenses are deducted in the year they are paid. Under the accrual method, income is reported when it is earned and expenses deducted when incurred, whether money has changed hands yet or not.

The accounting methods you use will depend on your business. You may want to talk to an accountant for help in setting up your system. Even with the support of a professional, you should understand your own system thoroughly.

Other sites of interest:

• Accounting Tips for Government Contractors
• Bookkeeping and Accounting
• Cost Accounting Implementation Guide
• Paycheck Calculators
• Shareware from the SBA

FREE and low-cost assistance for small businesses is available from your local Small Business Development Center.

This document was prepared by the San Joaquin Delta College Small Business Development Center. Send comments to: Gillian Murphy

Acknowledgements, disclaimers, etc.