Bookkeeping Basics for Small Business Owners + bookkeeping software | Episode 6 - Small Business 101

Small business bookkeeping can feel daunting! There are so many guides to business bookkeeping but who knows what is truly the best way to organize our money!

If you want to really learn business bookkeeping 101 then keep watching this video!

🔹 Join Us in Startup Society:

0:52 Basic Financial Terms
3:26 Separating Business and Personal
4:18 Investing In Your Business
4:50 Bookkeeping Software
6:18 Simple Spreadsheet
7:45 First Steps You Should Take
8:30 Setting Up Your Spreadsheet
9:14 Complete Guide to Setting Up Your Business Finances

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[gillianzperkins]

What’s your biggest question about organizing and managing your business money??

[auntpurl]

This!!. It's the kind of advice my husband gives the kids -- and he's had a successful small business all of their lives that paid for their college degrees. Wise!

[intuitivedaughtersofgod]

I’m blown away by how much GOLD you fit into 10 minutes!!! Thank you!

[SY-spuo]

Gillian always gives the best tips, don't you agree? 👋

[worldcitizenra]

As a retired accountant who has advised small and medium-sized businesses at various times over a 50 year career, most everything Ms. Perkins mentioned in the video is spot on advice. Three points especially: register your business, keep your business money separate from your personal money (even though it is a pain in the rear to have to put money into your business account from your personal account every time you want to spend money if the business account is short of funds), and keep track of all transactions that are in any way related to the business whether they are cash or credit.

There are several points in the video where the explanation of terms is superficial out of necessity due to the shortness of the video and possibly as a marketing technique to sell memberships in the small business start-up program being sponsored (the cynic in me comes out). However, lack of clarity could get a person starting a business into trouble or result in misunderstandings that cause huge headaches for the business owner.

Owner's Equity - the explanation in the video (at 1:34) is that subtracting liabilities from assets give the total value of the business. Not true. It is simply the amount of money that can be returned to the owner after all liabilities are paid (assuming that the business is using accrual accounting). The value of the business is independent of the calculated Owner's Equity. It is very possible to have a business for which the Owner's Equity is large, but the business has no value in the market place.

Gross Profit - the video defines (at 2:53) gross profit as an alternative term for revenue. Not really. Gross Revenue or Gross Sales is the total money value of all items or services sold in the course of business. Net Revenue or Net Sales is Gross Sales less any discounts or a few items of expenses that are directly related to selling & delivering the items or services. Gross Profit or Gross Margin is Net Revenue or Net Sales minus the costs directly associated with making the products or delivering the services that are sold. The types of items included in each category may be different depending on the type of business.

Cashflow Statement and Balance Sheet - the explanation (starting at 1:53) of the link between the two statements ignores the effect of cash basis accounting, which is a legitimate accounting method and may be beneficial for small businesses. The definition of Profit (at 3:08) may also be different depending on whether accrual or cash basis accounting is used.

The recommendations for accounting software to use also have the potential to create problems for someone starting a business. Not because the recommended programs are bad. Rather, when it comes to accounting for a business in order to meet tax, bank lending, or investor reporting requirements, there is a significant potential for someone not trained in accounting to make mistakes in setting up the software and recording transactions, even with the most user friendly accounting software. Those mistakes could cost the business more money that going to an accountant in the first place.

My concerns about incomplete or somewhat inaccurate information could have been addressed early in the video simply by shortening the section on accounting to emphasize the need for a complete set of financial statements and the importance of keeping track of all business related transactions. Then, recommending that anyone starting a business search for and work with a qualified small business financial adviser, such as Virtual CFO Susan Boles with whom Ms. Perkins has partnered for the finance section of the StartUp Society she pitches at the end. It seems strange that a person who got her start in business by doing outsourced work for others would not recommend early and often that people starting businesses contract with those who use their expertise to provide services to others who need that capability, but don't have the expertise. There have always been local CPAs and qualified bookkeepers providing small business financial services. Since the 2008 financial crisis, there have been thousands of well experienced accounting professionals who have moved into virtual CFO services as a matter of necessity as mid- and upper level accounting jobs were eliminated. Both local CPAs & bookkeepers and virtual CFOs can provide services that go far beyond simply keeping accounts for a starting business, in addition to making the transaction recording a lot less of a headache for the business owner.

[TheFinancialSpotlight]

This is a wonderful video. Great job and that's coming from an Accountant 😁. I just put together a guide for small businesses that touches on all of these topics. I haven't even had a chance to put together a video about it yet. You did it for me. I'll just send people here if they need a clear and concise overview.

[josie]

Thank you Gillian. You're always so clear and easy to understand.

[KirileeCosplay]

Absolutely awesome! Today is my first day being self employed and I am setting everything up. I have been loving this series so far! Thank you!

[OlgaPogozheva]

I had difficulties with setting up financial business account, and it was my cofounder who helped me figure this out (he had another running business by this time). And yes, fast forward 3 years in operation, we’re still using spreadsheets on Google 😁

[sandralewin]

Thank you for this video and making it simple to understand!!!

[bethanharding]

For me this has really helped, thank you

[brander]

Wow, Gillian thanks so much for this. I guess I've been lost in the gaps

[unknown]

Yeah, she always give us such endless valuable information...

[rickileah]

Thank you for your help! This video is literally just what I needed to know. You always give so many options and it great.

[lubnabashein]

I don’t usually comment but the way you explain everything is brilliant

[patriciaajones]

Very well explained. It made me think about my college accounting courses, which I still have in my textbooks. I actually referred back to these books from time-to-time for a clear understanding. o

[danielazziptrips]

I have to confess that you lost me in the beginning with so many terms 🤣🤣 thank you so much for this video! :)

[melis]

Thanks from a complete beginner, this is helpful.

[RayaFlora]

Your videos are very useful and provide lots of information. I have received lots of help after watching this post, please continue to share this kind of information. Thank you.

[marketingempiregroup]

Great words for any business!🙏🏼Will be sure to share 😎