New York Bookkeeper | Top 6 Tips You Need To Know About Bookkeeping
Bookkeeping is an important subfield within the broad concept of Accounting. It involves the necessary day-to-day, detail-oriented work of tracking, recording, and categorizing financial transactions for a business using source documents. Running a business in New York City means dealing with fast-paced finances, high expenses, and complex tax regulations. Keeping accurate books requires consistency and attention to detail to ensure every transaction is properly recorded. A skilled New York bookkeeper carefully tracks all incoming and outgoing money, making sure everything is categorized correctly—helping businesses stay organized in a city where every dollar counts.
The data produced from a bookkeeper’s work appears in financial statements, which provide detailed information on how the business is running. Some of the key financial statements include:
1. Key Financial Statements
Balance Sheet
Profit and Loss Statement (also known as the Income Statement)
Statement of Cash Flow
Statement of Equity
These statements are crucial for business owners as they provide comprehensive financial data to assess business performance. They are also reviewed by banks and private money lenders to determine loan eligibility, investors to assess financial viability, and of course, the IRS to support end-of-year tax returns. The IRS requires all sole proprietor business owners to file a Schedule C, also called Profit or Loss From Business, which contains information from the Profit and Loss statement that a New York bookkeeper will provide.
2. The Foundation of Bookkeeping: The Accounting Equation
At its core, bookkeeping revolves around the balance of the Accounting Equation:
Assets = Liabilities + Equity
Each bookkeeping transaction follows the Double Entry Accounting method, ensuring that any change on one side of the equation is balanced by an equivalent change on the other.
For example, if a business records a $500 increase in assets, there must be a corresponding $500 increase in liabilities or equity to maintain balance.
3. Understanding Assets, Liabilities, and Equity
Asset Accounts (What You Own)
Checking Account
Savings Account
Accounts Receivable
Inventory
Computers, Equipment, and Buildings
Trademarks and Intellectual Property
Increasing assets → Debit
Decreasing assets → Credit
Liability Accounts (What You Owe)
Credit Cards
Lines of Credit
Payroll Tax Payable
Sales Tax Payable
Notes Payable (Loans)
Accounts Payable (Bills Owed to Vendors)
Unearned Revenue
Increasing liabilities → Credit
Decreasing liabilities → Debit
Equity Accounts (What’s Left After Debts Are Paid)
Owner’s Investment
Owner’s Draw
Retained Earnings
Income and expense categories affect temporary equity accounts:
Increasing income → Credit
Increasing expenses → Debit
4. Example Transactions in Bookkeeping
Simple Example: Recording a Sale
You own a New York based marketing business and sell monthly service packages for $600. A client pays you via check. To record this transaction:
Debit Checking: $600 (increase in assets)
Credit Sales Revenue: $600 (increase in equity)
This balances because assets increases by $600 and equity increases by $600, with no change in liabilities.
Complex Example: Taking Out a Business Loan
You secure a $10,000 loan from a bank to cover business expenses, with a 5% interest rate. You immediately spend the money on a laptop, marketing ads, and office rent.
Recording the loan:
Debit Checking: $10,000
Credit Notes Payable: $10,000
Making your first loan payment of $500:
Credit Checking: $500
Debit Notes Payable: $458.90 (The principal payment)
Debit Interest Expense: $41.10 (The interest payment)
Purchasing a laptop for $350:
Debit Office Expenses: $350
Credit Checking: $350
Buying marketing ads for $1,000:
Debit Advertising Expenses: $1,000
Credit Checking: $1,000
Paying rent for your virtual office ($300):
Debit Office Rental Expense: $300
Credit Checking: $300
Each of these transactions follows double-entry bookkeeping, ensuring the accounting equation remains balanced.
5. Why Every NY Business Needs a New York Bookkeeper
Operating a NY business is hard enough on it’s own. You are dealing with complex financial regulations, high tax obligations, and varied industry requirements. A New York bookkeeper can help you navigate:
Sales tax compliance for local and state taxes
Payroll tax filings
Tracking accounts payable and receivable
Generating financial reports for investors and lenders
Organizing transactions to ensure IRS compliance
Hiring a professional New York bookkeeper ensures that your financial records remain accurate, allowing you to focus on growing your business.
6. Bookkeeping Software: Making Accounting Easier
QuickBooks Online is one of the most widely used bookkeeping software solutions, providing business owners with automated transaction tracking, invoice creation, and reporting tools. However, while the software simplifies data entry, it still requires proper categorization and manual review to avoid errors.
A New York bookkeeper who is a Certified QuickBooks Online ProAdvisor can help:
Set up automations correctly
Identify misclassified transactions
Ensure bank reconciliations are done properly
Provide financial reports tailored to your business needs
Final Thoughts
Accurate bookkeeping in New York City is essential for maintaining a healthy business. A skilled New York bookkeeper ensures that financial transactions are accurately recorded, financial statements are well-organized, and compliance with tax regulations is maintained. Whether you’re a contractor, real estate investor, or small business owner, partnering with a qualified bookkeeping professional can make all the difference in achieving financial success.
If you're looking for a New York bookkeeper, consider hiring an experienced QuickBooks Online expert, such as Cameron Jones at Check Bookkeeping, to save you time, keep your finances in order and help your business thrive! Schedule a free discovery call today!
