You’re a brand new business owner. Congrats! Now, with the independence of entrepreneurship comes the responsibilities of ownership tasks – and as you probably know, keeping track of your business finances is a top priority. But worry not! We’re here to help you get started off on the right foot.
Once you’ve signed up for Kashoo, one of the first things that you need to do is set up your accounts and enter the opening balances. Let’s take a look at what this really means.
Let’s assume that you established a business bank account and deposited $1,000 of your own money to seed the business. The first thing you need to do is get this bank account set up inside of Kashoo. Here’s how, in just a few steps…
- First, go to the Accounts section
- From the Bank Accounts section, fill in the Name and Description fields. The Name of the account can be something like “Citi Chequing.” The Description can be something like “CitiBank Business Checking.” Be sure that the Type is set to “Bank” and then click Add Account.
Note: Kashoo will automatically assign a number to your bank account. You’ll probably notice that that account number is not the same as the account number your bank assigned to your bank account. This is totally OK. Kashoo views your bank account as it does any other “account.”
Next, you’ll want to set up an account that reflects where the money came from. In this case, you personally gave the money to the business. That’s equity. So you’ll need to create an Equity account.
From within the Accounts section, scroll down until you see the Equity category. Select that. For the Name, enter “Capital Contribution.” For Description, enter something that clearly reminds you what this money is. “Money put in by owners” works. Then make sure that the Type is set to “Equity.” Click the Add Account link.
That’s it for setting up the accounts. Now we need to record the deposit that you made. Here’s how…
- Go to the Adjustments section
- Enter the date that you made the deposit, then enter a description. “Opening balance” is a good descriptor to use in this case.
- On the first line, in the Account column, select your Bank account.
- In the Debit column enter the amount of the deposit . Sticking with the same example, that’s $1,000.
- Then move to the second line and from the Account column and select the Equity account that we just set up: Contributed Capital.
- In the Credit column enter the amount of the deposit. This should be the exact same amount that you’d entered into the Debit line next to your bank account.
- Click the Add button.
That’s it! Not too difficult, right? Double check your work in the Dashboard just to be sure. You should see the Bank balance of $1,000 on the right side of the screen.