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Small Biz Accounting Tips, Sept 2013
September 10, 2013
|Hello small business owners!
Well, Labor Day has come and gone. We're moving into Fall.
In this months newsletter we're going to talk about loans - owner loans and also general loans.
So let's get started!
Accounting Journal EntriesLoans
Sometimes in a small business, you find yourself giving a loan to or taking a loan from your business. Keep in mind, the business is yours but the money is separate.
Whether you have to put money in to keep the bills paid, or you have a personal need and have to take money out of the company, here's how to do that on the books.
When you make a loan to your small business, it can be handled a couple of ways.
Say you deposit $5,000 of your personal funds into your company.
That entry would look like this:
This increases Cash and increases your Equity in the business.
Let's say your home furnace goes out - in February no doubt - and you need a loan from the company to pay for it. Here's the journal entry:
Let's say instead of a Sole Proprietor, you own a Corporation.
Let's look at journal entries for the same situations as above, just for a Corporation.
If you put personal money into the Corporation, it's considered a loan.
And if you take money out of the Corporation, this is a Receivable to the company. It anticipates receiving money from you.
Accounting for loans
To handle other loans, like auto loans, short-term lines of credit, building loans, etc., you would make similar journal entries to post the purchase (asset) and the loan (liability).
If you're looking for a better way to record and track your purchases and expenses, maybe it's time to look into some kind of accounting software.
QuickBooks is the leading small biz accounting software. I've used it for years. The software is made for small biz owners, not accountants, so it's easy to navigate and easy to use.
For Loans, you just record cash received from loan proceeds, or cash disbursed - if giving yourself some money. QuickBooks posts the journal entries to loan accounts or your Equity account. You can then access the balances on these accounts anytime you need to.
There is a little investment of time at the front end - entering your company information, but once it's there you're good to go!
They say every business should have a website.
Well, maybe you don't have the money to hire a web designer. Maybe you aren't all that techie (like me) and wouldn't know how. Well, let me tell you about SiteBuildIt.
SiteBuildIt (SBI) is my web hosting company. But it's so much more than web hosting. There's so many plug-ins and extras - at no extra cost - and so much information and instructions on getting traffic and setting up pages - and you don't have to know one lick of HTML. I set this site up using SBI - and they've helped me set up this newsletter, and a blog, and forms and links and everything you see here.
So, if you're thinking about getting your small business online, whether it's just to give prospects a place to find out who you are and where you are before they call you - or whether you'd like to set up a site for some passive income for your family - you owe it to yourself to check out SBI. They have 90 days free service just to check them out.
Well, that's it for this month.
I'll be back next month with more tips and help for your small business bookkeeping.
PS: Please feel free to let your fellow small biz owners know about this newsletter! Send them to my sign up page - the last button on my navigation panel.
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