Accounting 101

Basically, the two accounting methods differ only in the timing of when transactions are credited or debited. In practice, though, accounting is rarely basic.

I recommend: You can find good primers on the accounting methods at Nolo.com, Business Owner's Toolkit, Inc.com and American Express. You can print out a PDF version of this guide to cash vs. accrual accounting provided by Texas A&M University to read at your leisure.

Computerize the process

Unless you're running a micro-business, you probably have your accounts on computer. But does your current software meet your accounting needs? And will it allow you to change as your business grows?

I recommend: Top Ten Reviews looks at the pluses and minuses of, you guessed it, ten business accounting programs. The Logos accounting program also provides a side-by-side look at some factors to consider in deciding whether to use the cash or accrual method.

Hand over the books

Regardless of whether you choose the accrual or cash accounting method, you'll probably find that hiring an accountant to keep track of the numbers is a worthwhile expense.

I recommend: Gaebler Ventures and is4profit each offer tips on how to hire a business accountant. The first recommendation is to ask for local referrals. But you also can find business accountants via the practitioner search engines at Accountants World, GoodAccountants and the National Society of Accountants.