Bookkeeping for Central Texas Small Businesses

Bookkeeping is the routine that keeps a business's records current month by month, instead of all at once when a return is due. This guide explains what that routine actually involves for a small business in Killeen, Kempner, Temple or anywhere in Central Texas, using the IRS's and the SBA's own descriptions.

Moreno Financial Services is a veteran-owned practice in Kempner. Our monthly bookkeeping covers categorization, reconciliation and a clear monthly picture of income and expenses, with plans starting at $600/mo and the exact scope confirmed before we begin.

What bookkeeping is

The IRS describes it plainly: business transactions are ordinarily summarized in books called journals and ledgers. A journal is where each transaction shown on your supporting documents gets recorded. A ledger holds the totals from all of those journals, organized into accounts, so you can see sales, supplies or rent as a running figure instead of a pile of receipts.

Books kept in software count the same way: the IRS applies the same requirements to electronic records as to paper ones. Its own example of a small business recordkeeping system includes a business checkbook, a daily and monthly summary of cash receipts, a check disbursements journal, a depreciation worksheet and employee compensation records. Every one of those is still bookkeeping, whatever program holds it.

Single-entry and double-entry books

The IRS guide to starting a business and keeping records describes the two basic systems. A single-entry system is based on the income statement, the profit or loss view of the business. A double-entry system records every transaction as a debit in one account and a credit in another, which makes it self-balancing, and the IRS notes it has built-in checks and balances to assure accuracy and control.

There is a second choice alongside that one. The SBA notes that businesses often use either the cash or the accrual method of recording purchases. Which system and which method a particular business uses depends on how it actually runs, so this guide does not pick one for anyone.

What a month of bookkeeping involves

In QuickBooks Online, Intuit's help article says clients connect their own bank and card accounts. Once an account is connected, its transactions come into QuickBooks to be reviewed and categorized, and QuickBooks suggests a category for each. We review those suggestions, because software alone still mis-categorizes. Matching then links a bank transaction to an invoice, receipt or bill already in the books, which keeps the books accurate and prevents duplicate entries.

Reconciliation closes the month. QuickBooks describes it as making sure the amounts in the books match the real bank and credit card statements, and it needs each account's monthly statement to do it. The IRS gives the plain version: when the bank statement arrives, make sure the statement, your checkbook and your books agree. If they do not, the IRS notes the difference can come from items such as bank charges not yet entered in the books, and the month is not finished until each difference is explained.

A monthly close checklist

However the books are kept, the same steps come around at the end of every month:

• Collect the statement for every bank, card, loan and payment account the business uses
• Confirm each connected feed brought in the whole month
• Categorize new transactions and match them to invoices, receipts and bills
• Reconcile each account to its statement until the two agree
• Clear anything uncategorized or unexplained before the month is closed
• Run the month's reports and read them

The three reports an owner should read

Bookkeeping exists to produce reports, and the SBA's learning platform defines the core three. The income statement, often called the profit and loss, shows how the business has performed over a given period. The balance sheet shows assets, liabilities and owners' equity at a specific point in time, and the SBA calls it the foundation of managing your finances. The cash flow statement shows the timing of all cash going in and out of the business.

That last one matters more than it sounds. The SBA notes that even profitable businesses can fail if they do not have the right amount of cash available at the right time. A report is only as useful as the month it reflects, which is why the monthly routine matters more than any single report.

Sales tax and payroll add their own steps

The Comptroller's permit FAQ explains who needs a sales and use tax permit, and filing and paying through Webfile takes a Webfile number from the Comptroller's mailings. In the books, sales tax collected is tracked apart from income; sales tax records for Texas sellers walks through it.

If the business has employees, the IRS employment tax pages and the Texas Workforce Commission's unemployment tax program page, both linked below, explain what applies. For bookkeeping clients who need it, we can run payroll on QuickBooks and Intuit, with the scope and fee settled on the free call.

Local help, and when to call us

Central Texas owners also have outside help to lean on. The McLennan Small Business Development Center offers no-cost consulting, training and resources to owners in Bell and Coryell counties, and the Texas State University SBDC serves Lampasas County. The Temple Chamber's SizeUp Temple market data tool is open to members and nonmembers alike, and the Governor's Office of Small Business Assistance publishes a step-by-step guide to starting a business in Texas. None of them is connected to us.

When the books need a person every month, book a free 15-minute call. Tell us how you run money today, whether that is QuickBooks, a spreadsheet or a shoebox, and we will assess the scope and give a clear quote. If the books are already months behind, start with catch-up bookkeeping, which rebuilds usable books before the monthly rhythm begins.