How to do bookkeeping for a small business
Bookkeeping means recording every rupee that comes in and goes out, sorted into categories, so you know your real profit and can file tax correctly. The simple method: keep a separate business bank account, record each transaction, keep bills, reconcile every month, and review profit and loss.
The 6 steps
- Open a separate business bank account and route all business money through it
- Record every sale and expense, with a bill or reference
- Sort each entry into a category (sales, purchases, rent, salaries, tax, owner draw)
- Reconcile the books with the bank statement each month
- Review profit and loss and cash flow
- Keep records for the period your tax law requires
What mistakes are common?
Mixing personal and business spending, missing bills, entering the same transaction twice, and forgetting to record cash sales.
How can AI help?
AI can read the bank statement, classify each line, find duplicates and missing bills, and draft the books for you to approve. FINOVAQ does this in about a minute.
Frequently asked questions
Do I need an accountant if I use software?
Software handles entry and drafts. A CA helps with advice, notices, audits and sign-off.
How often should I do my books?
Monthly at minimum. Weekly is better for shops with many transactions.