Bookkeeping basics: A guide for small businesses

Any monies you owe to suppliers or other agencies for goods or services provided are placed under Accounts Payable. Accounts Payable is an expense account that lets you know how much money you owe to your creditors. Rent, business insurance, and software subscriptions are expenses you pay before small business bookkeeping receiving the benefit of the service—these are prepaid expenses. As a business owner, you’ll most likely have to create a complete financial report at least once a year, for tax purposes. However, there are plenty of reasons to make quarterly, or monthly financial statements as well.

Creating a Business Plan for Your Bookkeeping Business

Efficient bookkeeping involves foresight, meaning that a business should always plan for upcoming financial events, including tax time. Good preparation and documentation are critical for paying taxes (including payroll taxes) on time. When you first begin the bookkeeping journey, collect everything you have that could be relevant to establishing financial history.

• Enter some basic business information and we’ll send you up to five free quotes customized to your unique bookkeeping needs.
• Novo small business checking accounts are a great tool to use in conjunction with your bookkeeping system.
• To become certified, you need to pass a four-part examination, show two years of full-time bookkeeping experience or 3,000 hours of freelance or part-time experience, and sign a code of ethics.
• Online ads, like with Google or Yelp, help you obtain premium placement above relevant search results.
• Offer to refer their businesses to your clients, as this will help you expand your client base.
• And more importantly, there’s no need for physical backup because files are in the cloud.

What can I expect from your bookkeeping services?

Learn how bookkeeping can streamline business practices with small business bookkeeping tips. You’ll learn which accounting methods to choose, how to track expenses, and much more. Bookkeepers are responsible for accurately recording all financial transactions for a business. Since the IRS accepts digital records, it’s smart to use a cloud-based system like Dropbox, Evernote, or Google Drive so you never have to deal with smudged receipts. You can also use apps like Shoeboxed, which are specifically made for receipt tracking.

Become Familiar with Bookkeeping Statements

If you’re a sole proprietor or freelancer, chances are you get by with a manual journal or spreadsheet software to record your financial activity. But even a freelancer could benefit from using accounting software to record their financial transactions. Creating a budget is one of the most important things a small business owner can do. But in order to create a budget that is accurate, you’ll need to be able to access the information such as accounts receivable totals, vendor payments, and cash flow. Generally speaking, accrual accounting is better for larger, more established businesses.

Step 6: Fund Your Bookkeeping Business

Go Answer is a bilingual answering service that connects your customers to live customer service agents via phone, text, web chat, or email 24/7. This step is important because it establishes your business as legitimate and may help to limit your personal liability if your company is ever sued. Whether you’re doing this part-time or full-time, you don’t want to skip this step. Non-accounting degree holders who would like to pursue a bookkeeping career can take bookkeeping courses online. We recommend choosing courses that provide a certificate so that you can include it on your resume. You can get bookkeeping courses from Accounting Coach, Coursera, or LinkedIn.

Useful features to run your business

• With DIY bookkeeping, you have complete control over your financial records, reducing the risk of errors.
• These days, you’ve got three options when it comes to bookkeeping tools.
• You can also use apps like Shoeboxed, which are specifically made for receipt tracking.
• Psst—to stay organized and make recording easier, remember to keep your personal finances and your business finances separate.
• This will give you a clear picture of your business’s past financial performance and help you make realistic projections for the future.
• This step is important because it establishes your business as legitimate and may help to limit your personal liability if your company is ever sued.

Whether it’s a lack of interest or knowledge, many businesses outsource this process to a professional bookkeeper to ensure accurate and healthy finances all around. There are some easy-to-use accounting software that don’t require prior bookkeeping experience. However, to get the most out of accounting software, we recommend that you work closely with your accountant. Desktop accounting software can go as high as more than $1,000 per month, depending on the number of users included in the plan.

What kinds of businesses should I target for bookkeeping services?

• However, to help market your business and set it apart amongst the competition, you may decide to specialize in a specific industry.
• All you have to do is scan the paper, check the details, then move on to the next one.
• If you wait until the end of the year to reconcile or get your financial transactions in order, you won’t know if you or your bank made a mistake until you’re buried in paperwork at tax time.
• This allows you to connect with your target market without wasting your budget on people who won’t be interested in your services.
• You’ll analyze your financial documents to get key insights into your business’s health, which will help you make smart business decisions going forward.

Records older than six years can be securely disposed of by hiring a professional document shredding company. For digital records, QuickBooks allows you to easily delete or condense historic transaction data to save you storage space and secure sensitive financial information. These five bookkeeping tasks seem like a lot to think about, but you can make things significantly easier by following three golden rules. Combine these with quality accounting or bookkeeping software, and you’ll stay on top of your books every month without breaking a sweat. Recording can be pretty time-consuming (especially if you’ve been putting it off), which is where accounting software like Wave’s can help.

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