# Bookkeeping Setup > Sets up bookkeeping systems with chart of accounts, transaction categories, and reconciliation procedures. Use when establishing or organizing business bookkeeping. - Skill: `reaperinvest/bookkeeping-setup` (Agent Skill) - Install (CLI): `npx skillmds@latest add reaperinvest/bookkeeping-setup` - Raw SKILL.md: https://api.skillmd.com/api/skills/reaperinvest/bookkeeping-setup/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: reaperinvest (https://skillmd.com/u/reaperinvest) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/reaperinvest/bookkeeping-setup --- # Bookkeeping Setup ## When to Use This Skill Use this skill when you need to: - Set up a chart of accounts for a new business - Organize transaction categories for clean financial tracking - Create reconciliation procedures and schedules - Establish bookkeeping workflows from scratch **DO NOT** use this skill for tax preparation (use tax-prep-checklist), financial projections, or choosing accounting software. This is for setting up the bookkeeping structure itself. --- ## Core Principle CLEAN BOOKS START WITH A SIMPLE CHART OF ACCOUNTS AND CONSISTENT CATEGORIZATION — COMPLEXITY SHOULD BE ADDED ONLY WHEN THE BUSINESS NEEDS IT. --- ## Phase 1: Business Profile ### Required Inputs | Input | What to Ask | Default | |-------|------------|---------| | **Business type** | "What type of business? (service, product, SaaS, consulting)" | Service-based | | **Entity type** | "Sole prop, LLC, S-corp, C-corp?" | Single-member LLC | | **Revenue streams** | "How do you make money?" | No default — must be provided | | **Accounting method** | "Cash or accrual basis?" | Cash basis | | **Software** | "What bookkeeping software do you use or plan to use?" | QuickBooks Online | | **Monthly transaction volume** | "Approximately how many transactions per month?" | Under 100 | **GATE: Do not proceed without business type and revenue streams.** --- ## Phase 2: Chart of Accounts ### Standard Chart of Accounts ``` ## Chart of Accounts: [Business Name] ### Assets (1000-1999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 1000 | Business Checking | Bank | Primary operating account | | 1010 | Business Savings | Bank | Reserve / tax savings | | 1100 | Accounts Receivable | Current Asset | Outstanding client invoices | | 1200 | Prepaid Expenses | Current Asset | Annual subscriptions paid upfront | ### Liabilities (2000-2999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 2000 | Accounts Payable | Current Liability | Bills owed to vendors | | 2100 | Credit Card | Current Liability | Business credit card balance | | 2200 | Sales Tax Payable | Current Liability | Collected sales tax owed | | 2300 | Payroll Liabilities | Current Liability | Payroll taxes owed | ### Equity (3000-3999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 3000 | Owner's Equity | Equity | Owner's investment in business | | 3100 | Owner's Draw | Equity | Money taken out by owner | | 3200 | Retained Earnings | Equity | Accumulated profits | ### Revenue (4000-4999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 4000 | [Primary Service/Product Revenue] | Income | Main revenue stream | | 4100 | [Secondary Revenue] | Income | Additional revenue | | 4200 | Other Income | Income | Interest, refunds, misc | ### Cost of Goods Sold (5000-5999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 5000 | Contractor Payments | COGS | Freelancers/subcontractors | | 5100 | Materials / Supplies | COGS | Direct project costs | | 5200 | Platform Fees | COGS | Payment processing, marketplace fees | ### Operating Expenses (6000-6999) | # | Account Name | Type | Purpose | |---|-------------|------|---------| | 6000 | Advertising & Marketing | Expense | Ad spend, marketing tools | | 6100 | Software & Subscriptions | Expense | SaaS tools, apps | | 6200 | Office Supplies | Expense | Supplies, equipment under $2,500 | | 6300 | Professional Services | Expense | Accounting, legal fees | | 6400 | Insurance | Expense | Business insurance | | 6500 | Meals & Entertainment | Expense | Business meals (50% deductible) | | 6600 | Travel | Expense | Business travel | | 6700 | Education & Training | Expense | Courses, books, conferences | | 6800 | Rent / Coworking | Expense | Workspace costs | | 6900 | Phone & Internet | Expense | Business portion | | 6950 | Bank Fees | Expense | Monthly fees, wire fees | ``` Customize account numbers and names based on the user's specific business. --- ## Phase 3: Procedures ### Transaction Categorization Rules ``` ## Categorization Guide | Transaction Type | Category | Account | Notes | |-----------------|----------|---------|-------| | Stripe/PayPal deposits | Revenue | 4000 | Separate by product if multiple | | Contractor payments | COGS | 5000 | Must issue 1099 if $600+ | | Monthly software (Slack, etc.) | Expense | 6100 | | | Facebook/Google ads | Expense | 6000 | | | Owner's personal transfer | Equity | 3100 | NOT an expense | | Quarterly tax payment | Equity | 3100 | NOT an expense — draws for taxes | | Credit card payment | Liability | 2100 | NOT an expense — reducing liability | ``` ### Reconciliation Schedule ``` ## Reconciliation Procedures ### Weekly (15 minutes) - [ ] Categorize all new transactions - [ ] Review any uncategorized items - [ ] Flag anything unusual for review ### Monthly (1 hour, by the 10th) - [ ] Reconcile all bank accounts - [ ] Reconcile credit cards - [ ] Review accounts receivable — follow up on overdue invoices - [ ] Review accounts payable — pay outstanding bills - [ ] Run P&L report and compare to budget - [ ] Back up data ### Quarterly (2 hours) - [ ] Review chart of accounts — add or merge as needed - [ ] Run P&L and Balance Sheet for the quarter - [ ] Calculate and pay estimated taxes - [ ] Review contractor payments for 1099 threshold ### Annually (half day, January) - [ ] Full year reconciliation - [ ] Prepare 1099s for contractors - [ ] Generate annual P&L and Balance Sheet - [ ] Package tax documents for CPA - [ ] Review and update chart of accounts for new year ``` --- ## Phase 4: Deliverable ``` ## Bookkeeping System Setup Complete ### Delivered 1. Chart of accounts (customized for your business) 2. Categorization guide 3. Reconciliation schedule 4. Key rules and procedures ### Next Steps - [ ] Enter chart of accounts into [software] - [ ] Connect bank and credit card feeds - [ ] Set up recurring transactions for regular expenses - [ ] Schedule weekly 15-minute bookkeeping sessions - [ ] Set monthly reconciliation reminder for the 5th of each month ``` --- ## Example: Solo Consultant **Accounts needed:** 15 total (2 bank, 1 credit card, 1 AR, 3 equity, 2 revenue, 6 expense). No COGS accounts needed — time is the product. No payroll — owner's draw only. Key rule: owner's draw is NOT an expense. --- ## Anti-Patterns - **Too many accounts** — a solopreneur does not need 50 expense categories. Start with 10-15 and add only when you need reporting granularity. - **Mixing personal and business** — one business bank account, one business credit card. No exceptions. - **Categorizing owner's draw as an expense** — owner's pay is equity, not an expense. This mistake inflates expenses and understates profit. - **Reconciling once a year** — monthly reconciliation catches errors early. Annual reconciliation turns into a forensic investigation. - **Ignoring accounts receivable** — if you invoice clients, track what is outstanding. Money billed is not money received. --- ## Recovery - **Messy existing books:** Start clean from the current month. Go back and fix previous months only if tax filing requires it — otherwise, focus forward. - **No bookkeeping software:** Set up QuickBooks Online, Wave (free), or Xero. Any of these work for small businesses. Do not use spreadsheets beyond the first year. - **Mixed personal and business accounts:** Open a business bank account immediately. Move all business transactions there. Separate historical transactions as best you can. - **Behind on reconciliation:** Block 2-4 hours and reconcile month by month starting from the last clean month. Do not skip ahead.