Accounting isn’t as scary as it might seem –

when you’re first starting out, it’s really as simple as keeping track of income and expenses.

income

Tracking income

The biggest reason to track income is to make sure that everyone who owes you money has actually paid you. It’s also helpful to see all of the money coming into your business in one place to keep track of your business’s cashflow.

expense

Tracking expenses

The biggest reason to track expenses is for tax deductions, which can save a big chunk of money on your tax bill. It’s smart to categorize purchases while they’re fresh in your mind. Plus, its good to keep tabs on how you spend money.

If you keep track of these two things, you’ll be better prepared for some upcoming events, like filing quarterly sales taxes and annual income taxes. You’ll also want records in case you’re ever audited.

If you’re ready for a little bit more, take your first stab at accounting.

Use a good ol’ Excel spreadsheet to track the basics.

Or try QuickBooks Simple Start. It can automate your accounting, help with tax prep, and give you insight into the health of your business.