The Best Practices for Your Small Business
Bookkeeping is a necessary evil for small business owners. It can be time consuming and tedious.
However, bookkeeping is essential to the success of a small business. With so many avenues and options to choose from, it can be complicated for small business owners to get started.
Take time to consider the best bookkeeping practices for your small business. We’ve rounded up some of the best tips and practices in bookkeeping for small business owners.
Small Business Bookkeeping Methods
Traditional bookkeeping refers to hiring accountants to do your bookkeeping for you.
The benefit to this method is that you’ll receive insight from an expert and hardly have to do anything in the process. The cons, however, are that this method involves higher fees, slower turnaround times, and can rack up other consulting fees.
Additionally, business owners must decide whether to hire an in-house bookkeeper or to use an external firm. Hiring your own in-house accountant generally makes more sense for larger, most complex organizations.
Companies like Quickbooks provide software that is designed specifically for small business accounting and bookkeeping needs.
This software helps small business owners save time and money by keeping their bookkeeping in house without having to hire a full-time bookkeeper.
Opting to do your own bookkeeping can help your small business save a lot of money, but only if it is done well. Fortunately our staff is here to help. Learn the ins and outs of Quickbooks for small business at our upcoming trainings.
Software as a service is another option for small business owners looking to manage their own bookkeeping. Services like Bench offer cloud-based bookkeeping services with the addition of available CPAs and accountants.
These services are a good option for small business owners who do not have very complicated tax filing and bookkeeping needs.
Getting Started with Small Business Bookkeeping
After choosing which bookkeeping method is right for you, the first step is to streamline all your finances. This will include all of your accounts, pertinent data entry, and to reconcile transactions.
This is a great time to familiarize yourself with your chosen accounting software and learn options for automation.
Next, choose either single or double entry accounting.
Single entry accounting refers to entering data one time as either an income or expense. This method is best suited for businesses without large inventory quantities. Double entry refers to entering data twice as both a debit and a credit. This method is more complicated but results in a balanced book and can help prevent errors.
Enter data regularly once your system is established. Data should always be entered correctly and in a timely fashion.
Other Things to Consider
Establish and maintain your accounts receivable and payable. You’ll also want to set up payroll using a payroll software. It’s good practice to keep statements and tax documents on hand for several years, and to get a tax specialist.
We’re Here to Help with Bookkeeping (and more)
If you’re ready to start or grow your business, we’re ready to help. Our dedicated team of business consultants assists entrepreneurs from business start to succession or sale.
Contact us today to learn more about how we can help with business planning, accounting and bookkeeping, feasibility studies, and more.