5 Basics of a Bookkeeping System
A bookkeeping system is essential for any business, no matter how small. You have several options in setting up a basic bookkeeping system. The five basics of a bookkeeping system are:
Check register - records each check, much like a personal checking account.
Cash-receipts journal - tracks incoming money.
Sales journal - will show each business transaction, what business took place, the amount of the invoice and the sales tax.
Accounts Payable register - records bills, money owed, the date of bill, who it is from and what service was given.
General journal - allows you to adjust the entries in the other four registers.
Computerized systems do the math easily and accurately

Most small businesses choose software over manual bookkeeping systems. For about $200 or less, you can get a good package for your startup business. Don’t buy a system that’s too complex, but also avoid a system that will have to be replaced in two or three years when your business has grown. I recommend QuickBooks Pro or Simple Start.

Paper systems are convenient for very small businesses

If you’re just starting your business, a manual, or paper, bookkeeping system may be the way to go. Setting up the 5 registers in Excel spreadsheet will be helpful with the math.

Additional Tips and Tactics

Even if you choose a computer program for bookkeeping, you still have to maintain appropriate backup paper files. Those should include paid invoices and receipts from vendors, purchase orders, paid bills and deposit records from customers.
Maintain a clean audit trail of information.
Record the date paid, check number and amount paid on each invoice you pay.
Keep a copy of each check received from customers and attach that to deposit slips so you have a record of each payment received.
Keep as detailed a record as possible of the invoices sent to customers, and the outstanding amounts due.