Every small business starts small and the need for an accounting system right from the start is important. Accounting in a small business simply needs a simple way to record the accounts.

It is important to record every penny that you invest into your business and to record every penny that you make from your business. If you don’t do this right from the start then you are likely to lose money.

Small business accounting is made simple with the use of an inexpensive / free windows package called Excel.

This program will allow you to set up a simple bookkeeping system that is easy for you to update every day.  When a small business starts they don’t need to employ a bookkeeper with this system as they can learn it online themselves and set up a simple accounting system that is easy to follow.

Excel is simple enough to use but if you don’t want to go to the bother of learning how to set up a set of accounts yourself, there are people on Ffifer.com or Odesk.com who will do it for you for five dollars or whatever you agree to pay. Once you have the Excel spread sheet set-up for you then all you will need to do is to enter the daily takings and expenses. The program will do the rest for you.

Accounting for small business and excel are a hand-in-glove package for small businesses.

Most small businesses have a lot more outgoings than incomings so your spread sheet will look very heavy on the expenses side but don’t become discouraged by this. Many of these initial expenses are a ‘one-of’ expense. This does make it hard at the beginning to know precisely what your monthly expenses are going to be but after about three months you will see a pattern of costs stabilizing.

These expenses that have now stabilized in your monthly figures need to be compared to your projected costs that you have budgeted for in your business plan.  This is an important step to take and it is also a milestone in your business.

These will give you a fair indication of the likelihood of success but they are not set in concrete. If the figures are way out of reach of each other then you may need to either re-do your business plan or re-do your thinking. But it is not the time to throw in the towel and say it is “all too hard” and that the business failed. All you have succeeded in doing so far is setting everything up to now get on and do some actual business and the excel spread sheet will soon become your friend.