Accounting, Bookkeeping & Financial Controls

1. 1

   Set up the books

   Pick accounting software and set up a chart of accounts that fits your kind of business. Tools such as QuickBooks, Xero or Wave let you connect your bank and card accounts so transactions flow in on their own.

   Ask your accountant to help with the first setup. They can choose income and expense categories that match your tax return and confirm whether you use cash or accrual accounting. Getting the categories right at the start saves hours of cleanup later and makes your reports easy to read.

   • Choose accounting software
   • Connect your bank and card accounts
   • Set up categories with your accountant
   • Confirm cash or accrual with your accountant
2. 2

   Record every transaction

   Enter or review every sale, bill, payment and transfer, ideally each week. When bank feeds pull transactions into your software, your job is to check each one and put it in the right category.

   Set a regular time for this, such as Friday morning, so it never piles up. Write a short note on anything unusual, such as a refund or an owner deposit. Small weekly sessions take a few minutes. Letting it slide for months turns into a stressful catch-up job right before taxes are due.

   • Block a set time each week for bookkeeping
   • Review and categorize every new transaction
   • Add notes to anything unusual
   • Ask your bookkeeper about unclear items
3. 3

   Keep receipts and invoices

   Save a copy of every receipt, bill and invoice and link it to the matching transaction. Most accounting software lets you snap a photo of a receipt with your phone and attach it right away.

   Good records back up your tax deductions if the IRS or your state ever asks questions. They also help you settle disputes with customers and vendors. Store digital copies in a safe, backed-up place. Ask your accountant how long to keep each type of record, since the rules can vary by record and by state.

   • Photograph receipts when you get them
   • Attach each one to its transaction
   • Store copies in a backed‑up location
   • Ask your accountant how long to keep them
4. 4

   Reconcile and review monthly

   Each month, match your books to your bank and credit card statements so every dollar is accounted for. This is called reconciling, and most accounting software walks you through it.

   After reconciling, look at your profit and loss report, balance sheet and cash flow. Compare this month to last month and to your plan. Look for costs that jumped, jobs that lost money and customers who have not paid. A monthly review only takes about an hour once it becomes a habit, and it is where you spot problems early.

   • Reconcile every bank and card account
   • Run profit and loss and balance sheet reports
   • Compare results to last month and your plan
   • Write down one action from the review
5. 5

   Money owed in and out

   Track who owes you money and who you owe, and act on both every week. Your accounting software shows unpaid customer invoices, called receivables, and unpaid bills, called payables.

   Follow up on late invoices with a friendly reminder, then a phone call. Most software can send reminders on its own. On the other side, pay vendors on time but not early unless there is a discount, so cash stays in your account longer. Watching both lists keeps you from running short of cash even when sales look strong.

   • Check unpaid invoices every week
   • Send reminders for late payments
   • Schedule bills to be paid by their due date
   • Watch cash on hand against bills coming up
6. 6

   Spending rules and controls

   Write down who can buy what, up to what amount, and who has to approve it. For example, a crew lead might buy supplies up to a set limit, while anything larger needs the owner's okay.

   Split duties so one person does not handle money from start to finish. The person who approves a bill should not be the only one who pays it and records it. If you are the only person in the business, review bank statements yourself every month. These controls catch honest mistakes and make theft much harder.

   • Set spending limits for each role
   • Require approval above each limit
   • Split approving, paying and recording
   • Review statements yourself each month
7. 7

   Owner money

   Decide how you pay yourself and record it the right way in your books. How an owner gets paid depends on the business structure. Sole proprietors and many LLC owners take draws, while S corporation owners usually take a salary through payroll plus distributions.

   Ask your accountant which method fits your setup and how much is reasonable. Move owner pay on a set schedule instead of grabbing cash when you need it. If you put your own money into the business, record it as an owner contribution or a loan, with paperwork for a loan.

   • Ask your accountant how you should get paid
   • Pay yourself on a set schedule
   • Record draws, salary or distributions correctly
   • Document any money you put in

General information only, not legal, tax or financial advice. See the Disclaimer.