Is it possible to do my own bookkeeping online without hiring an accountant or bookkeeper as an online content creator? Let’s find out!
In this video, I want to go over this popular question we got in our inbox: Is it possible to learn to do my bookkeeping online as a youtube content creator? And the short answer is absolutely.
There’s dozens of tools and software right now available to help online entrepreneurs figure out how to do exactly that- handle their own bookkeeping and taxes for their online business.
To name a few of the more popular ones, we have of course the most popular being Quickbooks online, but then we also have Freshbook, Sage, Xero, and Wave.
Recommended: QBO Quickbooks Online
AT FCF our recommended software is definitely Quickbooks Online – simply because it is the most widely useful accounting software and that means you can expect them to be always up to date with the latest and it will also have the most integration available.
Which is really important these days in the world of interconnected technology. You want something that can play nicely with most software solutions you are using. There is definitely a learning curve to use Quickbook Onlines, but they do offer a comprehensive tutorial and video guides on how to use the different functionalities of the bookkeeping software.
I would say the time investment it would take to get properly setup would be around 10-12 hours. It is worth the effort to understand your way around as you want to make sure what you are doing is in compliance with what is considered generally accepted accounting principles.
I will make sure to include in the description a link to the video guides if you guys are looking into getting started on learning how to navigate within QBO.
Guide to QBO here:
Alternative 1: FreshBooks
If you are looking for something with a lesser learning curve, then I would definitely go with Freshbooks. It is a newer face on the market, but one distinct advantage from using it, is they really aim for the users that don’t have the business or accounting to understand how to navigate around the UI and understand what they should be entering.
They are a great tool if your business mainly has a ton of invoices and expenses as I would not recommend Freshbook if you are running an ecom business as it is not meant to handle that level of transactions.
However for an online content creator, I think you guys would benefit from an easier to pick up bookkeeping tool, so I think Freshbook should definitely be at the top of your list. I will also iclude a link below for you guys to check that out.
The next area I want to cover is, in order to be able to handle your bookkeeping online there’s certain terms you really should get famiarilzie with when you are navigating any bookkeeping software.
We want to give you an introduction of the 5 Common Terms you should know before you jump into doing bookkeeping for your busines and that is:
1. Accounts Receivable
Accounts receivable (AR) refers to a bookkeeping account that holds the total of all unpaid sales invoices for a business. The unpaid sales invoices show the money owed to the business by a customer or client, listed on the balance sheet as an asset. Many businesses offer credit terms to their customers and accounts receivable represents the balance of money owed to a firm for goods delivered or services rendered but not yet paid for by customers. Once the customer submits payment, their invoice is then removed from this group.
2. Accounts Payable
An accounts payable (AP) is a record of all unpaid bill amounts owed by the business to suppliers, other businesses, and vendors on any given date by a business. On the balance sheet, you will find accounts payable as a liability. Think of this as an IOU to your creditors or suppliers that must be satisfied within a certain time frame to avoid default. Similar to an AR, this is removed from the balance sheet once the bill is paid.
A term found on the balance sheet, an asset refers to any resource or items owned by your business that can be measured and has value. Examples of an asset include the following: cash in bank accounts, cash in a petty cash box, accounts receivables, inventory, land, buildings, vehicles, and equipment. Assets also include prepaid rent.
4. Balance Sheet
A balance sheet report shows the business owners and managers how much equity lies in your business, how many assets your business owns, and what outstanding liabilities your business owes. The balance sheet falls in line with the accounting equation. This is another key financial statement that provides a snapshot of your company’s financial position as at a specific date. Just like taking a family portrait every Christmas and compiling a photo album, you can compare the “pictures” of your business, year to year to identify any changes.
5. Bank Reconciliation
This is the final total of debits and credits must match in order to complete the reconciliation of your accounts. Bank recon is important because it allows you to detect fraud, prevent overdrafts, identify bank errors and forecast cash flow.
6. Break-Even Point
This is the sales volume at which a business can exactly cover its fixed and variable expenses.
7. Cash Flow
The term, “cash flow,” refers to a report of the movement of cash and cash-equivalents (short term, liquid assets such as treasury bills) into and out of your business. Positive cash flow allows your business to meet current obligations, reinvest and plan for future growth. Utilizing a cash flow forecast can help your business estimate the income and expenses for the year ahead. These figures will be based on prior earnings and costs and can help a business work out their sales goals and budget.
Also known as the cost of goods sold or the cost of sales, this metric refers to all expenses directly tied to the sale of products in your inventory. COGS also refer to the cost to your business of any parts or stock that are sold to customers. For a service-oriented business, this additionally represents the cost of manufacturing expenses and services rendered.
Expenses refers to money spent, or costs incurred to generate sales. Most purchases made by your business are categorized as an expense. These appear on the profit and loss report and can be used to reduce the amount of tax owed to the government. Examples of an expense include wages, utilities, office supplies, and marketing.
Revenue represents the sales a company earns from providing a service or selling a product. Also known as Sales, this is the first line that appears in the Income Statement.
There’s obviously dozens more terms that we could introduce here, but I think this would be a good start to get yourself going in the right direction before you start doing your own bookkeeping online.
We want to end with letting you guys know WHY accurate bookkeeping matters and we will let u know 3 reasons:
- Accurate bookkeeping means you understand your financial picture
- Accurate bookkeeping means greater tax savings at the end of the year
- Accurate bookkeeping means you are ready to sell your business at the end of the day.