Creating a Framework
In This Chapter
Finding a spot for every single transaction
Gathering materials with account classifications
Building foundations for your Profit & Loss report
Analysing income with a bird’s-eye view
Making everything just right with Balance Sheet accounts
The finished home — your first chart of accounts
If bookkeeping were just about doing your tax, the way you categorise information would be pretty simple. Income would be just one total, and most expenses would be lumped together, with only stuff like bank interest, rent and wages separated on reports.
However, your job as a bookkeeper is about much more than tax. You want to generate reports that explain exactly where your income comes from, which activities generate the most moolah, what the expenses are, how actual results compare against budgets, and lots more.
The way you categorise business transactions ...