Bookkeeping is a hard task for any business, including non-profits. There are many different choices for booking, and I will cover the most popular options in this article.
I have seen three mains types of bookkeeping. Bookkeeping done in a physical book, bookkeeping done in Microsoft Excel spreadsheets, and bookkeeping done with special accounting software programs.
I used to work in an organization that sold about $2,000 – $10,000 a day in products. Every transaction was recorded by hand. Sometimes we would have to stay an hour late, because the books wouldn’t balance. The authorities that be thought something fishy was going on, and they could not believe we were really doing everything by hand. We eventually convinced them that it was all legitimate. Doing your bookkeeping by hand requires the least investment, but it can be time consuming and look suspicious.
The great thing about Microsoft Excel spreadsheets is that they are easy, transferrable, and the data is easily moved around. Many of your bank statements will transfer directly into the spreadsheet. If you have a good bank, you can call their customer service and they will teach you how to do this.
Some banks only let you import your transactions for a certain period of time, so make sure to import it regularly, or you may end up adding these figures by hand.
There are many accounting software programs out there, and many of them come with hefty price tags. The software itself is expensive, and you also need to teach your staff how to use it. Not only that, but most accountants have a particular software program they prefer. So if you buy the wrong accounting software, you may end up buying more after you get your accountant. Do not invest in a software program, until you have secured an accountant.
Accountants are very expensive, and they charge by the hour. There are many types of accountants, with varying levels of knowledge. I have talked to too many CPA’s who knew less about business taxes than I did. It is a little scary, but keep in mind there are dozens of specialties within the accounting field so choose your accountant wisely.
Once you have found an accountant they will tell you exactly how to set up your books. If you are still looking for an accountant, Microsoft Excel is your safest bet for bookkeeping. It exports easily, most people know how to use it, and it is easy to move data around in it.
Make sure to keep all of your receipts, and any contracts between you and your vendors.