Bookkeeping needs vary widely from one company to another. Everything depends on the type of business, the number of employees, and the number of investors. For instance, an IT consultant has much lower needs in terms of accounting than a convenience store owner since he has no employees, no inventory, no cash register, few customers and few expenses.
You can choose to do your accounting yourself or ask us to do it for you. And it is often better to have someone else do the work for you. Why? Firstly, because it’s not very expensive. Secondly, you can be sure it will be done perfectly. You will especially appreciate the fact of being able to get rid of a task that you don’t like and save time to focus on the most important and profitable aspects of your business. It’s very important to realize that if you hate this task then you will definitely have a natural tendency of reporting it for later and you will eventually accumulate delays in the production of your government documents which you will incur penalties, interests and different problems with tax authorities which may lead to your bank accounts ending up confiscated or even more.
At the end of this video, I’ll introduce a simple system of accounting on Excel. This system is suitable for many very small businesses whose owners really wish to do their own accounting. I will take the example of a small business services, an IT consultant who must make his tax remittances annually. The example could very well also apply to other professionals such as a doctor practicing alone or an owner of small apartment buildings.
What is a simple system?
It is a system that requires little to no learning and which can achieve the goal. What goal? Either basically let you do your GST and QST rebate, properly do your financial statements at year end, and maybe follow some simple tips. An advanced system, such as Simple Comptable, will also help you with the salaries for a few employees, track customer accounts, provider accounts and much more.
The simplest system of all – the simple Excel file
Doing one’s accounting using an Excel file, as we will see in a moment, is amazingly simple. If you have no employees or inventory, a small number of customers and little different expenses it is likely that the solution of a small Excel file is the best solution for you by far. In fact, the people who have these very small enterprises often have great difficulty using more sophisticated accounting systems such as Simple Comptable or Dynacom because they lack the necessary training to use these systems. And even after the training, these small entrepreneurs encounter great difficulties because the system is not often used.
This is where an Excel file shines. It draws its strength from its extreme simplicity. Its drawback is that if a company sees a significant expansion, it will not have the necessary reports. A small Excel can make the difference between a small startup company that survives and a dying one. In fact, the loss of time that the entrepreneur will suffer by trying to check out his accounting system will reduce the energy devoted to sales and customer service and it will quickly become a real problem.
A very small business often does not need a regular book-runner. An hour or two to three months, will be enough for an entrepreneur to successfully do what needs to be done. By doing it himself, he will also have the real figures before him in an instant, which often puts things in perspective for him.
Many people who have used my simple Excel file have greatly appreciated it. Once, a young inexperienced book-runner suggested that I sell the system. It really made me laugh, because the system, as you will see, is too simple to be sold.
First of all, to properly use this Excel system you must have a minimum of order. It’s not much, but at least you have to physically separate your business purchases from your personal purchases. Each deposit must also be well detailed so we can track what was deposited into which account, how much and when. An IT consultant can easily achieve his objectives by having a credit card in the company name and a bank account for the company, with its own debit card. He can thus easily separate his business from his personal purchases. Accounting will be much simplified as a result.
So let’s go, I will introduce the famous Excel file
