So, you want to learn more about how other people handle DIY business bookkeeping. You probably ended up here because you own or plan to own a small business. You know that managing your finances is critical to keeping your business thriving. Bookkeeping isn’t the highlight of anyone’s day, but getting a grip on it gives you confidence as a business owner and keeps you safe if the economy hits the skids. As you grow, make sure to keep this page handy. I will keep updating it as new rules and tools roll out.

My name is Christie, and I am a small business bookkeeper in Bellevue, WA. I’m excited to explain the basics of business bookkeeping in common language without getting too nerdy.

The Importance of DIY Business Bookkeeping for Small Businesses:

Think of bookkeeping as the heartbeat of your business’s financial health—it keeps everyone getting paid and shows you where you’re going financially. Proper bookkeeping makes sure you’re not overwhelmed by mountains of numbers, helping you grow your business with confidence. It’s not just about tracking every penny that comes in and goes out; it’s about using that information to make smarter business decisions, keep more of the money you make, and get ready for growth.

Detailed Glossary of Key Bookkeeping Terms:

Let’s kick things off by defining commonly used terms so you can talk the talk just as well as walk the walk. Here are the essential terms used in business bookkeeping:

• Assets: What you own that adds value to your business, like cash, stocks, property, and equipment.
• Liabilities: What you owe, plain and simple. This includes loans, credit card debts, and other payables.
• Equity: Think of this as your business’s net worth—what’s left when you subtract liabilities from assets.
• Income: The cash that comes in from selling your goods or services, gross and net.
• Expenses: The costs you incur to keep the business running, from rent and utilities to salaries and advertising.
• Cash Flow is the lifeblood of your business, showing the real-time movement of money in and out. It’s crucial to ensure that you can cover all your bases financially.
• Balance Sheet: A snapshot of your financial standing at any point, showing what you own and owe.
• Income Statement: A report that sums up how much money you made and spent over a specific period, showing if you turned a profit.
• Cash Flow Statement: A document tracking cash inflows (receipts) and outflows (payments), giving you insights into your liquidity situation.

Recent Advances in DIY Business Bookkeeping Technology:

Bookkeeping is always evolving alongside technology. AI and automation are up-leveling traditional bookkeeping, offering more efficiency and fewer errors. Artificial Intelligence automates routine tasks like categorizing expenses and managing payroll, allowing you to focus more on strategic financial planning. Keeping up to date on the latest programs that can help you ensures that you are working smarter, not harder.

However, there is real value in learning how to DIY or do-it-yourself. You’ll have a deeper understanding of your business as a whole. If someone ever challenges your pricing, you’ll know exactly how you got to that number and why it’s right for you. You’ll do a better job of choosing a vendor for bookkeeping because you’ll know the right questions to ask and what the answers should be. You might spot an error in a formula when the total doesn’t look quite right. Technology is a terrific tool, but a hammer is just a piece of iron and wood in one person’s hands and a multi-tool for someone with real-world construction experience.

Choosing Between DIY and Outsourcing Your Bookkeeping:

Tackling your business’s finances is entirely doable with the right tools, attitude, and a bit of elbow grease. That said, there’s no shame in calling in the pros for backup. I often team up with clients who manage their day-to-day books but lean on me for the heavy lifting during quarterly and annual check-ins.

It doesn’t matter if you go the DIY route or outsource to a pro. What matters is that your business stays compliant—and you are empowered with knowledge and control over your business finances. Bookkeeping is more than ticking boxes for compliance; it’s a road map for steering your business to success. Whether you take the reins yourself or delegate to trusted pros, commit to keeping your financial records sharp and insightful.

I offer a Quickbooks setup package for DIY business bookkeepers. If that sounds good to you, reach out and schedule a free 15-minute consultation.