An Easy-to-Use Manual Bookkeeping System

Credit card statements: You should have a separate credit card for your business. Highlight all business charges.

Bank statement: You should set up a separate bank account for your business. Take your bank statement or a copy of it and highlight all debits/charges.

As you did on the Income side, two-hole punch all these items and place them in the folder in order of reverse date with the most recent items on top.

Keep this system up-to-date, and at the end of the year you can take your neat little folders to any accountant, tax preparer, or IRS auditor so they can easily create accurate reports from your well-organized information.

Figure Out Your Bottom Line
Finally, at the end of the month, you can total all your expenses on the right side of the folder and total all your income from the left-hand side. Now subtract your expenses from your income to get your net income. Write this figure on either side of your folder. Congratulations, you've created an effective, yet simple bookkeeping system.