People think setting up a book keeping system is difficult. By following the steps below, you will be able to set up your own book keeping system without any book keeping software and with tools you probably already have. Once you know the fundamentals, you can apply them in any book keeping situation.
Find or buy a pad of paper with lines on it. If you have a steno pad, this is great because it already has the 2 columns. If not, make 2 columns. Label one column assets and the other liabilities.
Write down all your assets, such as home, car and jewelry in the asset column. Don't forget your checking and savings balances, stock and bonds you own, and IRAs.
Write down your liabilities, such as mortgage, car payments and credit card balances in the liabilities column. You will want to write the total balance, not the monthly payments.
Make a line for totals. Add all the assets, put it in the row for totals and do the same for your liabilities. Subtract the 2 totals. Hopefully your assets will be higher than your liabilities!
You have just completed a book keeping balance sheet! You can apply this to any type of book keeping situation and you have your book keeping system.
Apply the same principles as above if you have a computer with a spreadsheet software. You can create your book keeping system on your computer. Remember a computer is an asset.
Things You Will Need
- Pad of paper with lines
- Computer with spreadsheet software (optional)