Every business, regardless of size, must as a matter of survival keep an accurate account of every transaction.

Besides, it is required by law. As a business owner, you’re expected to maintain up-to-date records of all your business dealings.

However, most small businesses, especially new business owners don’t fully understand how bookkeeping works.

It’s no wonder then that 29% of small businesses fail in their first five years as a result of cash flow problems.

Another report puts 82% of small business failure to poor cash flow management and lack of understanding of cash flow.

Are you seeing the trend? lack of proper bookkeeping is one of the top reasons small businesses fail.

So, in this piece, you’ll learn what bookkeeping is, you’ll also read about reasons you should take bookkeeping serious, plus learn the difference between bookkeeping and accounting.

We’ve done the legwork for you by scouring the internet for free online bookkeeping courses specifically designed for small business owners that will help you learn basic accounting concepts.

Hopefully, by the time you’re done reading this post, you would have developed a solid understanding of what bookkeeping is, understands the importance of bookkeeping.

Can tell the difference between accounting and bookkeeping; plus have a rich list of free online bookkeeping courses you can take to brush up your knowledge.

So, if you’re ready, let’s dive in…

What is Bookkeeping?

Bookkeeping in its simplest explanation is a systematic process of recording, storing, and arranging the day-to-day transactions of a business.

Bookkeeping ensures that the day-to-day financial transactions of the business are accurately entered in the business ledger, are up-to-date, and comprehensive.

Bookkeeping must answer these questions:

What was sold for the day?

What expenses were made for the day?

Which customer paid their receivables?

How much depreciation liability does the business have?

It is important to note that bookkeeping also provides the core information from which financial accounts are made.

A successful bookkeeper must have knowledge of credits and debits; plus a basic knowledge of financial accounting which includes creating balance sheets and income statements.

Types of Bookkeeping

Traditionally, there are two main types of bookkeeping. Single and Double entry bookkeeping.

Your decision to use either of the bookkeeping methods depends largely on how complex your financial transaction needs are.

Single entry bookkeeping

Single entry is the simplest and easiest bookkeeping method. It is simply the recording of cash sales and expenses of a business.

Single entry is suitable for sole proprietorship and other businesses with minimal transactions.

The basic idea for this method is: enter a transaction in your sales column when a sale is made. Record an expense in the Expense column when it is made.

Then, at the end of the day, both columns – Sales and Expense – should balance out; the Expense and Sales column should also reconcile with your bank balance.

Your single entry bookkeeping should allow you, at a glance, see all the cash received and all the expenses made; plus any difference remaining within a given period.

Double entry bookkeeping

Double entry bookkeeping is at the core of most accounting software. It is a system where transactions are entered either as a credit or expense item, and then create another entry that traces the item to another account.

At the centre of double entry is the idea that assets must equal liability; hence the double entry.

To illustrate how a double entry bookkeeping works; let’s say, you just received a payment from a customer – this new cash will be recorded on the revenue column; and then, traced to the customer’s account where it will be entered as an expense.

Double entry bookkeeping is ideally suited for organizations that generate revenues through account receivables and or take stock of merchandise and inventory on credit.

Importance of Bookkeeping – why should you keep accurate records in the workplace

Helps you track business profit and growth

Without a properly kept book, you wouldn’t know whether your business is making a profit or running at a loss.

You wouldn’t also know if your business is growing. A well-kept accounting book gives you a snapshot of how well your company is performing.

Helps with budgeting

How do you set a budget for your business if you don’t know how much that comes in or goes out within a given period.

For effective budgeting, you need to have a solid idea of how much you need monthly to efficiently run your business. You also need to know the expected revenue for the month.

Eases tax preparation process

At the end of the financial year, you’re supposed to file your tax report for your business. Bookkeeping helps ease the filing process as it is easy to pull out all the invoices you need.

Also, bookkeeping helps you in preparing your personal income tax as a business owner since the bulk of your income comes from your business.

Makes it easy to report to investors

In a situation where you report to investors or you’re in the process of raising funds from investors, bookkeeping makes it easy to report the financial position of the business.

Bookkeeping makes it easy to generate financial statements which the investors would need to make informed decision about your business.

Encourages better cash flow

Bookkeeping helps you improve your business’s cash flow. The thing is, as you routinely enter revenues, expense, liabilities, and receivables you can also see which of your customers haven’t cleared their credit with you. You can then, take actions to recover the money.

Plus, watching the trend of your cash flows can help you develop better policy. For example, shortening the time it takes for your customers to pay up.

What’s the difference between accounting and bookkeeping?

A major misconception for most people is to think bookkeeping and accounting are the same thing. They are not. Bookkeeping is fundamentally different from accounting as you would learn in this section:

Bookkeeping as we explained earlier is the recording of the daily transactions of business as accurately as possible.

Accounting, on the other hand, relies on the information in the account ledger to create a financial statement at the end of the financial year.

While bookkeeping is focused solely on accurately recording financial data. Accounting is focused on creating financial statements that show the financial state of the business.

Bookkeeping does not require any special skills. A bookkeeper is not required to have any analytical skills; just a keen eye for details.

However, accounting does require special skills. An accountant is trained in several analytical methods in order to analyze financial data.

Free Online Bookkeeping Courses For Beginners To Learn Basic Accounting

• Accountingcoach.com
• Dwmbeancounter.com
• Freebookkeepingaccount.com
• National Association of Certified Public Bookkeepers
• US Small Business Administration
• MIT OpenCourseWare
• Futurelearn.com
• Openlearnuninversity.com
• Edx.org
• Alison.com
• Lynda.com
• XeroU
• Udemy.com
• Bean Counting 101 – www.a-systems.net
• Simple Studies Online Accounting Lessons
• Financial Management Training Centre
• Kutztown University Online Learning Programs
• Free Management Library
• Bigredcloud.com – Learn Accounting

Accountingcoach.com

Accounting coach was started in 2003 by Harold Averkamp, an experienced accounting professor who had spent over 25 years teaching accounting in universities.

The website is a great resource for people with diverse background, whether you’re a student, a small business owner, or even a bookkeeper – the site offers in-depth courses to help you learn, refresh, and deepen your understanding of bookkeeping basics.

Dwmbeancounter.com

Learn the basics of accounting and bookkeeping in a fun, humorous way. Beancounter offers introductory courses on bookkeeping. You can test your knowledge with the quizzes and tests; plus, use the lecture and tutorial guide if you’d prefer a more formal approach.

The best part is you can have fun while learning how to crunch numbers for your business.

Freebookkeepingaccount.com

The official site of the Bookkeeping Master. It claims to be the most popular free bookkeeping website on the internet.

One thing is certain though, there are several free bookkeeping tutorials you can use to brush up your bookkeeping skills.

National Association of Certified Public Bookkeepers

The National Association of Certified Public Bookkeepers (NACPB) offers a collection of free video lessons that are open to subscribers. You’ll have to subscribe first, before you can access the video tutorials.

After the lessons, you have a chance to take the certification exams to become a certified bookkeeper.

US Small Business Administration

A US government website dedicated to providing information, a guide for small business owners.

There’s a suite of lessons you can learn – from how to launch your small business, to how to grow your business, and how to manage day-to-day operations.

There’s also an Introduction to accounting lessons to teach you bookkeeping, how to create a financial report, and how to handle related issues.

MIT OpenCourseWare

The MIT accounting OpenCourseWare is a great place to start if you’re looking accounting and bookkeeping from a decision maker perspective.

FutureLearn.com

FutureLearn.com is an OpenCourseWare (OCW) aggregating platform. You can find lessons from top universities here.

The introductory bookkeeping and accounting course on the website are offered by The Open University.

OpenLearn

Take the course directly on the Open University website. You don’t need to register or login to start the lessons.

The Introduction to bookkeeping and accounting course will help you understand the fundamental rules of double-entry bookkeeping.

Helps you to explain the relationship between accounting equations and double-entry bookkeeping. Teaches you how to properly enter items in a double-entry ledger.

In addition, you’ll learn how to balance your account, create a trial balance sheet, and prepare a profit and loss balance sheets.

Edx.org

Edx.org is a online education platform that offers a variety of courses. The Introduction to Bookkeeping course is self-paced; which means you study at your convenience.

In the course, you’ll explore different ideas on business transactions, the banking system, and double-entry bookkeeping.

You’ll also learn how to manage Payroll and ledger accounts; plus, how to conduct account reconciliation and to prepare trial balance sheet.

Alison.com

Take the free self-paced courses on Alison.com. The Accounting principles course will introduce you to the fundamentals of accounting and recording procedures.

You’ll also learn about double-entry bookkeeping, trial balances, income statement, accounting equations, among others.

The course promised to teach you the competence you need to confidently prepare and present useful financial statement.

Lynda.com

Lynda.com is an on-demand online training platform which was acquired by LinkedIn. Most of the courses are offered by industry experts with several years of experience in the subject matter,

XeroU

If you’re using Xero accounting system or planning to migrate to the platform you may want to check out their resource center, XeroU, to learn how to get the best out of the software to meet your accounting and bookkeeping needs.

Udemy.com

Udemy.com just like Alison.com is an online e-learning platform that offers a variety of courses in different niches.

Most of the courses are published by experts. However, keep in mind though, you might be required to pay a small fee to access any of the lessons.

Aside, from the small fee, you can be sure you’d get quality lessons to learn basic accounting.

Beancounter101

A free accounting course for non-accountant aptly describes the simple easy-to-understand course format.

And depending on your favorite learning mode you can choose between text, video, or lecture format.

The course comprises of short video plus a text transcript you can follow to deepen or learn bookkeeping online.

SimpleStudiesOnline.com – Learn Basic Accounting Principles

Want to become proficient in accounting and bookkeeping? SimpleStudiesonline has one of the best delivered course you can find anywhere online.

With their study dashboard, you can be sure to stay on track as you learn or relearn accounting principles.

Financial Management Training Centre

The Free online accounting course offers detailed introductory short lessons to individuals with no prior accounting knowledge.

At the end of the course, you’ll have an excellent working knowledge of how accounting works, how entries are posted, and how financial statements are prepared.

Kutz Town University Online Learning Program

One of the largest on-demand small business and entrepreneur learning platform in the US.

The Kutztown University Online Learning program offers 44 free courses that range from financial planning and management to how to write a business plan, how to raise capital, marketing, sales, and everything in-between.

The accounting 101 course introduces you to the concept of accounting and bookkeeping.

Free Management Library

Just as the name implies, this website is a library of online resources. It has a rich list of tutorials, courses, blogs every niche.

Use the website to discover new platforms for your learning needs.

Bigredcloud.com – Learn Accounting

A free video series that will help you understand accounting and bookkeeping and run a more profitable business.

These courses are specially designed for business owners who want to learn how to balance their account, track every kobo that comes in, and want a snapshot of their organization’s financial health.

What next?

Now, you have no reason whatsoever not to brush up on your accounting and bookkeeping competence with these free online courses.

Take advantage of these free bookkeeping training online to improve your cash flow.