How to organize the accounts of small Business accounting?

Complementary Systems Small business accounting should always be done using a computerized accounting program to track income and expenses.
This will not only get you through tax time a lot easier, but will allow you to run more accurate projections and reports about your financial situation.
Despite this you still need a system for organizing your small business accounting paper trail.
The best possible solution is one that mirrors your electronic system by the same chart of accounts, the same categories, and the same accounting structure.
Keep this in mind as you set up each part of your small business accounting file system.
Tracking Income Whether your customers pay you with a check or a credit card, it is a good idea to keep a hard copy of the sales receipt and proof of the payment method.
I can’t tell you the number of times that one of my business clients had a problem with a payment, and all it took was one little piece of paper to save the day.
If your bank accidentally deposits your check into someone else’s account or credits the wrong amount to you, having a copy of the check will help them correct the problem more quickly.
If a customer disputes a charge or claims that you processed a fraudulent purchase, your merchant account may require a signed credit slip in order to rule in your favor.
So print out each order or service record and clip a copy of the check or charge slip to it – then file either chronologically (by month) or alphabetically (by the name of the customer).
You’ll be glad you did if you need to refer back to this information later.
Tracking Expenses As I mentioned earlier, your expense files should mirror your company’s electronic chart of accounts.
However, you don’t have to get quite so detailed.
The trick is to set up more generalized filing categories, that allow you to group several types of expenses together into one folder – for example: marketing office supplies furniture and equipment professional services business administration travel professional development Use whatever categories make sense to you, just remember that the goal is for you to be able to easily find an expense record if you need to refer back to it in the future.
If that means organizing your bills by month so that all of January’s paperwork is in one file and all of February’s is in another – fine, as long as you can locate what you need down the road.
Tax Records Another part of your small business accounting responsibilities will be to file the notices and statements that relate directly to your taxes.
The simplest solution is to have a folder called “current taxes” in your file, as a catch-all for collecting this paperwork.
Then when tax time rolls around, you can hand this folder and a disc with your small business accounting records on it to your accountant – easy as pie.
Of course, you’ll also want to have separate files for storing previous years’ returns and supporting documents.
Those can go in your archive files, rather than your active filing system.
Saving Time Means Saving Money

The first thing to do to organize your accounts is to make a chart of accounts which is a listing of all accounts along with their account numbers.
There are5 kinds of accounts:1.
Assets2.
Liabilities3.
Owners' Equity4.
Revenue5.
Expenses.
To make the chart of accounts: list the accounts that fall into each category under each of these headings,.
For example, Cash comes under the Assets heading.
Other Asset accounts are: Accounts Receivables, prepaid rent, prepaid expense, Inventory, office supplies, Equipment, Furniture, Computers, Cars and trucks, land, etc.
Liability accounts include: salaries payable, accounts payable, debt payable, taxes payable, etc.
Equity accounts include Owners' equity and retained earnings accounts.
Revenue accounts are accounts such as Fees Earned, Fee revenue, Sales, etc.
Expense accounts include all accounts for each type of expense, such as salaries expense, telephone expense, rent expense, tax expense, cost of goods sold, depreciation expense.
Other accounts that need to be set up are accumulated depreciation and owner's drawing accounts.
Each account is given an account number starting with the heading number.
For example, Cash may be given the account number100, Accounts receivable is given the account number110; Accounts payable, the account number200, salaries payable,210; Owner's equity,300, Owner's drawing account305; Fee revenue,400; Rent expense500, etc.
(You can find a sample chart of accounts online and use it as a guide.
you can also find it in my e-book Accounting for Beginners http://www.amazon.com/dp/B00B2BSTV8 ).
After the chart of accounts is set up, you need to get a journal (for recording daily transactions) and a ledger which will contain a sheet for each account in the chart of accounts.
the ledger is set up as follows: divide the ledger into5 parts, one for each of the following: Assets, Liabilities, Equity, Revenue, Expenses.
Make an account on a separate sheet for each of the accounts in the chart of accounts.
This is your general journal.
In the general journal you have an account for accounts payables and accounts receivables but not separate accounts for each customer or supplier.
(You can use separate ledgers for each credit customer and each credit supplier accounts.
Those ledgers are known as "Accounts Receivables Ledger" and "Accounts Payables Ledger.") The next step is to record all transactions in the journal on a daily basis, giving a reference to the receipt or invoice that you use as the basis of the journal entry.
After that, you have to post the transactions from the journal to the appropriate ledger accounts.
Posting can be done daily or weekly, depending on the number of transactions you have daily.
If you have only a few transactions daily, you can do the posting weekly.
but if you have lots of transactions daily, it's best to post daily so that at the end of the week you don't have a work overload.
Continue to make journal entries and posting to ledgers for the rest of the month (or quarter) in the same way.
At the end of the month, or quarter) make the trial balance to check the correctness of the debits and credits.
If the total debits don't equal total credits, find the error and correct it.
Don't proceed until the books are correct.
Next, prepare the10-column worksheet which makes it easy to prepare the financial statements.
Finally, make the financial statements.
Continue to do this for the rest of the year.
At the end of the year, you'll also need to journalize and post adjusting entries and closing entries, prepare the post-closing trial balance, before you can make the financial statements.
You may also have to make Statement of Accounts Receivables and Statement of Accounts Payables.
If you don't know how to do these, it' best to either take a course in bookkeeping / accounting or hire someone who can.
Once you have learned basic accounting skills, you can also take a course in accounting software and use the software for your accounting record-keeping.
Accounting programs greatly simplifies keeping accounting records as all you need to do is enter the journal entries.
the rest of the work (posting, financial statement preparations, etc) is done automatically.