How to Work With Online Business Spreadsheets

How to Work With Online Business Spreadsheets

How to Work With Online Business Spreadsheets

How to Work With Online Business Spreadsheets

Phase 2 – Step 11

 

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How to Work With Online Business Spreadsheets

How to Work With Online Business Spreadsheets

 

 

In this post, I will walk you through each of the Spreadsheets that you have created, and explain exactly what information is needed in each area, showing you How to Work With Online Business Spreadsheets. You can refer to this post any time that you have any questions regarding exactly what goes where.

 

The 1st Spreadsheet that you created was: Business Startup Expenses. This Spreadsheet should be complete, and you should not have to add or change anything.

 

Let’s go through all of the other Spreadsheets that you have created, one-by-one, and I will explain exactly what you should do with each of them.

 

2. Working With Your Fixed Assets & Depreciation Spreadsheet

 

The 2nd Spreadsheet that you created was:  Fixed Assets and Depreciation. The only time that you will make any changes to this Spreadsheet is when you Add or Delete an Asset.

If you are Adding an Asset, you will complete the following steps:

  1. List the Asset under the correct Category and/or Sub-Heading.
  2. List the Cost of the Asset.
  3. Key in the Start Date and Life Expectancy in the appropriate cells.
  4. If you are using the Straight-Line Method of Depreciation, Key in the Salvage Amount.
  5. Key in any Section 179 Amount if applicable.
  6. Figure and Key in each Year’s Deduction Amount.

 

There are a variety of reasons why you might Delete an Asset. They might be:

    • Sell or Trade In due to a desire to upgrade or otherwise replace.
    • Damaged beyond repair.
    • No longer needed.
    • Other

 

Regardless of the reason, if you are Deleting an Asset, you will complete the following steps:

  1. Strike thru the Item’s name or description.
  2. Key in the End Date.
  3. If you are Trading the Item in or Selling it outright, you may need to correct the Salvage Amount to the Amount that you get for the Item. If the Item is Damaged beyond repair, you may need to adjust the Salvage Amount.
  4. Regardless of the condition of the Item on the End Date, any leftover Amount for Depreciation that has not already been deducted, should be entered in full in the Year of your End Date.
  5. You will also need to Record the Transaction in your General Ledger Spreadsheet, as well as any other applicable Spreadsheet.

Example:  If the Item was Sold because you no longer needed it, and you are not replacing it with a similar Item, you would also Record the Amount that you received for the Item in your Accounts Receivable – Income Spreadsheet.

 

The object here, is to keep your Books Balanced, having everything in agreement. For the above Example, you would not just want to correct your Asset’s Purchase Amount in your Expenses Spreadsheet, as an alternative to listing the Amount received in your Accounts Receivable – Income Spreadsheet, because this would not agree with your Hard Copy Purchase Receipt Amount.

 

3. Working With Your General Ledger Spreadsheet

 

Remember, this Spreadsheet is a Daily Log of all of your day-to-day activities, both incoming and outgoing. Once each Transaction has been entered, it will also need to be Copied & Pasted to another appropriate Spreadsheet. Whether you do this daily, every few days, or on a weekly basis is up to you.

You should also have set up a separate Business Bank Account. This will make things much easier at Income Tax time, because all or your incoming and outgoing Business Transactions will be located in a separate Account. If you have not set up your separate Account yet, I strongly suggest that you do it now.

Whether your new Account is set up in your Business Name or just a secondary one set up in your Personal Name is up to you. You should also have a separate Debit Card for your Business, which should always, only be used for Business Transactions.

It is critically important that you always, only use the Account for Business purposes. If Funds are needed from your Business Account for personal use, they should always be transferred to your personal Account (as a Draw), as apposed to using the Business Account directly for any non-business Transactions.

 

You will Work With Your General Ledger Spreadsheet, as follows:

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Cell ‘G7’ – Key in the Amount that you opened your new Business Account with.
  3. Date – Record the Date for each Transaction.
  4. X – Use this Column to ‘X’ each Transaction when it has been Copied & Pasted into another appropriate Spreadsheet.
  5. Description – This Column should include a short, yet descriptive, bit of information, identifying each Transaction.
  6. Type – This Column will identify the Type of Transaction, whether Income or Expense, as well as which Spreadsheet the information was Pasted to. You can either expand this Column to whatever number of characters are needed to accommodate you, or simply identify your Spreadsheets by a number or letter abbreviations (your choice). My suggestions for numbers and/or abbreviations for each of your other Spreadsheets are listed below.
  7. Amount +  This Column will be used to Record any Income Amount applicable to a Transaction.
  8. Amount –  This Column will be used to Record any Expense Amount applicable to a Transaction.
  9. Running Total – This Column will be used to Record your Account Balance after each Transaction. You should use the ‘Easy Calculator’ to either Add or Subtract the Transaction appropriately, from your Running Total (Account Balance).

 

Suggestions for numbers and/or abbreviations for each of your other Spreadsheets, to be used to identify them in your ‘Type’ Column are as follows:

  1. Business Startup Expenses – BSE
  2. Fixed Assets & Depreciation – FA&D
  3. General Ledger – (No abbreviation necessary, since this Spreadsheet is used to record all Transactions.)
  4. Expenses – E (These will be for your General Expenses that are not listed on any other Spreadsheet.)
  5. Home Office Operating Expenses – HOOE
  6. Accounts Receivable – Income – AR or I
  7. Accounts Payable – AP
  8. Vehicle Expenses – VE
  9. Owner Draws – OD
  10. Retained Earnings – RE

 

4. Working With Your Expenses Spreadsheet

 

You will Work With Your Expenses Spreadsheet, as follows:

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Type – This will be the Category that your Expenses are in, such as:  Equipment, Supplies, Furniture, etc. (you can abbreviate). (Monthly recurring Expenses, such as Home Office Operating Expenses, as well as Vehicle Expenses will be listed in a separate Spreadsheet.)
  3. Date Paid – This will be the Date that you Paid for your Expense. When you purchase an Item on Credit, do not enter it in this Spreadsheet, but enter it into your Accounts Payable Spreadsheet.
  4. L. E. – Enter your Life Expectancy for each entry in this Column.
  5. Method – This is where you will put in your Method of Payment, whether:  C (for Cash), Chk (for Check – with Chk. Number), DW (for Direct Withdrawal), DC (for Debit Card) etc.
  6. At the end of each month, Copy & Paste all entries from this Spreadsheet into your Fixed Assets and Depreciation Spreadsheet into appropriate Cells and Figure your Depreciation for each.
  7. Jan. thru Dec. – Record the Amount of each of your Expenses each month as they are Paid.
  8. TOTALS (Column ‘R’) – This is where you will Record your annual TOTALS for each Expense, using the ‘Easy Calculator’ to add up each Row.
  9. At the end of each year, once all of your Expenses have been entered for that year, skip a Row after your last entry, and Cut & Paste (or Move) your TOTALS Row to the new Row .
  10. TOTALS (Cells:  ‘F20’ thru ‘Q20’) – This is where you will use the ‘Easy Calculator’ to add up your monthly TOTALS for all Expenses. (Add or Delete Rows as needed, leaving a blank Row after your last entry and your TOTALS. This may change your TOTALS Row from ‘Row 20’ to another.)
  11. Cell ‘R20’ – This is where your Result will go after using the ‘Easy Calculator’ to add all Items in Column ‘R’. (or a different Row in Column ‘R’ if you Added or Deleted any Rows).
  12. If you are using the ‘Cash Method’, you will Record Payments for Expenses as they are made. If you are using the ‘Accrual Method’, you will Record your Expenses as they are incurred.

It is best to have a small basket in your Home Office where you can temporarily store any Expense Receipts for the week. Then, at the end of each week, you can enter them into your Spreadsheet and file them in your Hard Copy File Cabinet in a Manila Envelope marked with the month and year, and filed under ‘E’ for Expenses.

 

5. Working With Your Home Office Operating Expenses Spreadsheet

 

This Spreadsheet will be used to keep track of all of your Home Office Operating Expenses. These Expenses will be tracked separately from your other Expenses, as they will be deducted in a different section on your Income Taxes Forms. Work with this Spreadsheet as follows:

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Expenses – This Column should include all of your Home Office Operating Expenses.
  3. Actual – List your Actual Total for the 1st group of Expenses (not Utilities). These will be Actual Total Amounts before taking into account the Percentage that you will use to compute your Deduction. These Expenses will be able to be deducted in full in other areas of your Federal Income Tax Forms.
  4. Percent – This is the Percentage that you are using for your Home Office Deduction.
  5. Date Paid – List the Actual Date that you Paid each of these Expenses.
  6. Jan. thru Dec. – Record the Amount of each of your Expenses each month as they are Paid. For your 1st group of Expenses (not Utilities), you need to use the ‘Easy Calculator’ to multiply your Actual times your Percent, with the Result being listed in the month the Expense was Paid. For your Utilities, each month, temporarily use the appropriate Actual Cell to List the Actual Total for each Expense, use the ‘Easy Calculator’ in the same way that you did for your 1st group of Expenses, with the Result appearing in the appropriate month’s cell. Then, Delete the Amount in the Actual cell, so that you can use it again for the following month’s calculation.
  7. TOTALS (Column ‘Q’) – This is where you will Record your annual TOTALS for each Expense, using the ‘Easy Calculator’ to add up each Row.
  8. At the end of each year, once all of your Expenses have been entered for that year, skip a Row after your last entry, and Cut & Paste (or Move) your TOTALS Row to the new Row .
  9. TOTALS in cells:  ‘E20’ thru ‘P20’ (or different Row) – This is where you will use the ‘Easy Calculator’ to add up your monthly TOTALS for all Expenses. (Add or Delete Rows as needed, leaving a blank Row after your last entry and your TOTALS. This may change your TOTALS Row from ‘Row 20’ to another.)
  10. Cell ‘Q20’ – This is where your Result will go after using the ‘Easy Calculator’ to add all Items in Column ‘Q’. (or a different Row in Column ‘Q’ if you Added or Deleted any Rows).

 

6. Working With Your Accounts Receivable – Income Spreadsheet

 

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Income Source – (If you operate multiple websites, you can simply list the website name in this Column, skip a Row, list your Income Sources for the first site, skip 3 Rows, and list your second site, etc.)
  3. Type – This will be the Payment Method used by each Income Source, which will usually be: Direct Deposit, PayPal, or Check, based on how you set each one up. You can abbreviate the entries for the Methods as: DD (Direct Deposit), PP (PayPal), and Chk (Check).
  4. Date Received – This will be the approximate Day of the month each Payment is Received. Format this Column for Date.
  5. Jan. thru Dec. – Record your Income each month as it is Received, from each Source.
  6. TOTALS (Column ‘P’) – This is where you will add up all of your monthly Income and Record your annual TOTALS from each Source, using the ‘Easy Calculator’ to add up each Row.
  7. At the end of each year, once all of your Income has been entered for that year, skip a Row after your last entry, and Cut & Paste (or Move) your TOTALS Row to the new Row .
  8. TOTALS (Cells:  ‘D20’ thru ‘O20’) – This is where you will Record your monthly TOTALS from all Sources, using the ‘Easy Calculator’. (Add or Delete Rows as needed, leaving a blank Row after your last entry and your TOTALS. This may change your TOTALS Row from ‘Row 20’ to another.)
  9. Cell ‘P20’ – This is where your Result will go after using the ‘Easy Calculator’ to add all Items in Column ‘P’. (or a different Row in Column ‘P’ if you Added or Deleted any Rows).
  10. You will enter a ‘0’ for any Income Source that you did not receive any Income from in a given month (this will verify that you did not forget to enter an Amount).
  11. If you are using the ‘Cash Method’ Accounting Process, you will only Record Income as it is Received, as apposed to Income when it is Earned, if you are using the ‘Accrual Method’.

 

7. Working With Your Accounts Payable Spreadsheet

 

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Accounts Payable – In this Column, List all of your Accounts for which you have purchased Expenses that you are paying for on Credit installments.
  3. Pay Type – This is where you will Record your Payment Method: C for Cash, Chk. for Check, DW for Direct Withdrawal, DC for Debit Card, etc.
  4. Date Paid (or Date Due, if using the Accrual Method) – List your Payment Dates here.

 

Adding a Mileage Log Book to Your Vehicle

 

Before I get into the instructions for Working With Your Vehicles Expenses Spreadsheet, there are two other Items that you need for each Vehicle that you use for your Business. They are:

    • a small spiral notebook (used for a Mileage Log Book)
    • a pen

You should keep these handy; in your glove box or better yet, your center console. You will need them to Record your Mileage for any Business Use trips that you make.

 

On the first page in each notebook, write your Vehicle’s:  Year, Make, & Model, along with your Starting Mileage on your odometer as of your Business Start Date. Then, on Dec. 31 of that year, Record your Ending Mileage on your odometer. Repeat for the next year, Recording your new Starting Mileage on Jan. 1.

On page 2, and all succeeding pages used, write in the Month and Year in the header area, and divide each page into 4 equal Columns:

    • Date
    • Starting Mileage
    • Ending Mileage
    • Business Mileage

Start a new page each Month.

Each time that you use your Vehicle for a Business related trip, whether it is to go pick up office supplies, or take your family out to a Business Meeting dinner, you need to Record each area in those Columns. You also need to save all Fuel Receipts for all Fuel used for each month (you will take a Percentage of these for your Business Usage).

 

At the beginning of each month, you need to Key in the Total Amount of all (Actual) Fuel Purchased during the previous month into your Spreadsheet in the appropriate month’s Cell. You will compute your Mileage at the end of the year, and then, will compute the Percentage of Business Use for each Vehicle, in order to compute each of your Vehicles Expenses Deductions. This will be needed at Income Tax time in order for you to be able to take your related Tax Deductions.

 

8. Working With Your Vehicles Expenses Spreadsheet

 

This Spreadsheet will be used to keep track of all of your Vehicles Expenses. These Expenses will be tracked separately from your other Expenses, as they will be deducted in a different section on your Income Taxes Forms. Work with this Spreadsheet, as follows:

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Expenses – This Column should include all of your Vehicles Expenses.
  3. Start Miles – This will be your Starting Odometer Mileage beginning on your Business Start Date.
  4. End Miles – This will be your Ending Odometer Mileage on Dec. 31st of each year.
  5. Total Miles – This will be the Total Miles driven for the year, from Business Start Date to Dec. 31st.
  6. Bus. Miles – This will be your Total Business Miles driven for the year, from Business Start Date to Dec. 31st.
  7. Actual – This will be used to Record the Actual Total Expense (before applying your Business Use Percentage. Use the ‘Easy Calculator’ to multiply the Actual Total Expense times your Business Use Percentage, with the Result going into the appropriate month’s cell for each Expense.
  8. Percent – This will be the Percentage of Business Use for each of your Vehicles. It will be the Result of dividing the Bus. Miles by the Total Miles.
  9. Date Paid – (or Date Incurred, if using the Accrual Method) – List the Actual Date that you Paid (or Incurred) each of these Expenses.
  10. Jan. thru Dec. – Record the Amount of each of your Expenses each month as they are Paid (or Incurred). You need to temporarily use the appropriate Actual cell to List the Actual Total Amount for each Expense. Then, use the ‘Easy Calculator’ to multiply your Actual Total Amount for each Expense times your Percentage, with the Result being listed in the month the Expense was Paid. Then, Delete the Amount in the Actual cell, so that you can use it again for the following month’s calculation.
  11. TOTALS (Column ‘U’) – This is where you will Record your annual TOTALS for each Expense, using the ‘Easy Calculator’ to add up each Row.
  12. At the end of each year, once all of your Expenses have been entered for that year, skip a Row after your last entry, and Cut & Paste (or Move) your TOTALS Row to the new Row .
  13. TOTALS (cells:  ‘I24’ thru ‘U24’) – This is where you will use the ‘Easy Calculator’ to add up your monthly TOTALS for all Expenses. (Add or Delete Rows as needed, leaving a blank Row after your last entry and your TOTALS. This may change your TOTALS Row from ‘Row 24’ to another.)
  14. Cell ‘U24’ – This is where your Result will go after using the ‘Easy Calculator’ to add all Items in Column ‘U’. (or a different Row in Column ‘U’ if you Added or Deleted any Rows).
  15. If you are using the ‘Cash Method’, you will Record Payments for Expenses as they are made. If you are using the ‘Accrual Method’, you will Record your Expenses as they are Incurred.

 

9. Working With Your Owner Draws Spreadsheet

 

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Date – Key in the Date of each Draw.
  3. Amount – Key in the Amount of each Draw. Leave 3 blank Rows between last Draw in a month and the first Draw in the following month.
  4. Jan. thru Dec. – Use Row 7 for ‘Results’, and using the ‘Easy Calculator’, Add Up all Draws for each month, with the ‘Results’ showing for each month in the appropriate cell.
  5. Cell:  ‘O7’ will be the ‘Result’ of Adding Up all months across Row 7. This will be your Annual Total.

 

10. Working With Your Retained Earnings Spreadsheet

 

Retained Earnings is that portion of your Profits from your business that have not been distributed elsewhere. They are retained for Investments in Working Capital and/or Fixed Assets, as well as to pay down any outstanding Liabilities. Work with your Retained Earnings Spreadsheet, as follows:

  1. Year – Key in the current year in cell:  ‘B3’.
  2. Beginning Retained Earnings – The Amount of money kept in your Business Bank Account at the beginning of each year.
  3. Gross Income – Income Received from all your Income Sources each month before deducting any Expenses (copied from your Account Receivable – Income Spreadsheet).
  4. Income Sub-Totals – Beginning Retained Earnings plus Gross Income.
  5. Expenses – Total General Expenses for each month (Copied from your Expenses Spreadsheet).
  6. Home Operating Expenses – Total Home Operating Expenses for each month (Copied from your Home Operating Expenses Spreadsheet).
  7. Vehicles Expenses – Total Vehicles Expenses for each month (Copied from your Vehicles Expenses Spreadsheet).
  8. Accounts Payable Expenses – List all Expenses purchased on Credit for each month.
  9. All Expenses Sub-Totals – Totals of All Expenses for each month (Adding Up:  Expenses, Home Operating Expenses, and Vehicles Expenses.
  10. Net Income – The Amount of money left each month after All Expenses have been deducted from Income Sub-Totals for that month.
  11. Owner’s Draws – The Amount of money for monthly Draws that you take from your Business Account each month.
  12. Ending Retained Earnings – Net Income minus Owner’s Draws.
  13. Year End TOTAL – GRAND TOTAL for the year of your Ending Retained Earnings.

 

Please leave a Comment or ask a Question in the Comments section below.

 

So, what’s next? A Business Plan.

See my next PostHow to Make a Business Plan for and Online Business

 

Thank you,

CJ Dodaro

 

 

 

 

 

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About Author

CJ Dodaro
I am a semi-retired, 65 year young man who has owned and operated a variety of successful business throughout my life. Starting most from scratch, I have acquired extensive knowledge for what is required for setting up a business properly from the ground up. Since these businesses have been both the brick & mortar type as well as the online variety, I feel qualified to help people in almost any business area that they wish to pursue. I wish to share the information that I have acquired in order to help other aspiring entrepreneurs become successful.

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