How do I set-up my first Accounting System? (2)

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How Do I Set-Up My First Accounting System? (2)
Accounting & Financial Management

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Recommended Software

QuickBooks Pro - by far the most popular and most user-friendly accounting software. (amazon.com) - SPECIAL: You can get a FREE Copy of QuickBooks Pro with any approved Merchant Account - click here to learn more.
Simply Accounting - not as user-friendly but includes many of the same features as QuickBooks Pro at a lower price. (amazon.com)
PeachTree Accounting - entry-level product that provides the basics of accounting at a low price. (amazon.com)

Setup Your "Chart of Accounts"
After choosing a method for recording transactions, it's time to setup your "chart of accounts". A "chart of accounts" is simply a listing of all the various accounts in your accounting system. There are income accounts, expense accounts, asset accounts, etc.

As noted above, a bookkeeper can be of great assistance in setting up your initial chart of accounts. Also, QuickBooks Pro and some other software programs include a "wizard" that will customize a "chart of accounts" for your business.

Learning and Maintaining Your Accounting System
Once you've chosen your accounting system, the next step is learning and maintaining your accounting system. Learning the system will obviously depend on what solution you've adopted, but maintaining the system is accomplished primarily by 2 things:

1. You Have to Use the System - once you've taken the time and energy to setup an accounting system, you have to actually utilize it properly. This means entering every transaction, check, bill, charge or refund.

2. Reconcile Your Bank Statement - the best way to maintain your accounting system is by reconciling your bank statement with your accounting system every month. This means that you compare each transaction from your bank account or accounts with your accounting system and make sure that they balance. This process alone will force you to properly account for the company's money.

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Source: http://www.mynewcompany.com/accounting.htm

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