Simple Small Business Accounting and Bookkeeping
Bookkeeping refers to recording financial transactions such as sales and payments. Although, many small businesses skip this process to focus on their sales and only at the end of financial year they make rough financial statements, it is one of the most important aspects in a business especially when you aim to improve your profit with limited resources. Despite the importance of this tool, small businesses neglect it altogether due to the time and efforts it takes. This is the reason why a moving company does not count it as an optional activity.
Accounting is for Business
The basic reason for bookkeeping is to manage the finances of a business. Bookkeepers who record daily transactions can determine which sources of income should be collected, and which expenditures should be made. In today’s world, bookkeeping can prevent small businesses from being conned as well as ensure the smooth flow of cash into the business.
Another reason for bookkeeping is that it is the first step to full-fledged accounting. Without the transactions being recorded, the generation of cash flow and income statements will be difficult. As a result, analyzing financial data for a business’ growth will become impossible. Additionally, since accounting statements won’t be seen, then the business may have trouble getting an accurate picture of its taxes.
Single entry or Double entry? Basics of Bookkeeping
If you are the owner of a small business, you should make use of bookkeeping. There are two systems which you can choose from: the single entry bookkeeping system and the double entry bookkeeping system. The first method is most suitable for your business since you only record income and expenses. As for the second method, transactions are recorded twice using debits and credits.
If you don’t want – Bookkeeping Services do the work
Are you looking for a reliable and cheap bookkeeper? Locating an expert bookkeeper is neither difficult nor complex these days, you as owner of a small business; you can as well outsource for a bookkeeper. The main reason why you want to outsource is because you want to pay them for the services you needed from them and if you employ a full-time bookkeeper then you will not only pay them for keeping your books but also provide them with other staffing needs as demanded by the law. Ref: The detailed reasons and benefits of hiring accounting services
These include paid leaves, performance reviews, bonuses, health insurance, on-the-job training and safe working facilities and conditions. All these obligations will make you incur costs that you can easily avoid via bookkeeping outsourcing. This is because of the fact that you will simply assign work to an independent contractor who already possesses their resources. Uncontrollably rising office overheads is a major managerial problem faced by most owners of start-up businesses.
Small businesses don’t have resources to waste. Use outsourcers
Did you know that employees are among the most expensive assets your business has? If you want to see costs declining, gradually, try farming out some of the tasks they do for you. To be specific, do bookkeeping outsourcing first. Among all your employees, bookkeepers and accountants are perhaps earning the highest salaries. If you combine their total monthly rates with their mandatory staffing needs, you are probably spending more money than your new business can afford. Remember that failure to pay employees’ salaries might attract strict industrial court measures against you.
So, whether you get new contracts, the law requires you to take care of your workers. If caring for your internal bookkeeper has become difficult, try bookkeeping outsourcing for a change. By doing so, you will have power to hire an external accountancy firm when it is really needed. When business is slow, you can keep your books and avoid spending any money. This clearly shows that substituting your internal accounting staff for independent accounting companies is a very prudent decision.
Since you will entrust a third party with your accounting work, you will no longer waste time dealing with problematic employees. When it comes to bookkeeping outsourcing, you can request part-time or full-time services. In addition, you could buy one or more services. Some of the services offered include reconciliation of bank statements, creditors and petty cash. An outsourced bookkeeper will also follow up debts payable and debts receivable on your behalf.
Doing daily helps your business and reduces cost of accounting and bookkeeping
The most conventional way to record transactions is by using daybooks, petty cash books, journals and ledgers. Each of these records transactions in different ways, so you should use all of these in your business. However, if you prefer less hassle and a paperless working environment, you can opt for computerized bookkeeping.
After locating the right accounting company to assign books to, you will just do what you are asked to do. Modern bookkeeping outsourcing services are rendered quickly via software tools. Instead of buying these tools, and spending time to learn how to use them, you should let the experts handle it for you. Since they update books every day, they are more experienced than most part-time bookkeepers.
Besides, a company uses a large team to finish a lot of work in the shortest time possible. When you try Bookkeeping Outsourcing, you will soon forget about piling accounts because your bookkeeper is too busy or inexperienced. The rules of outsourcing are simple as all you need is a company to form a contract with. After agreeing on all important matters, the firm will take over your accounting matters and let you have more time to run other affairs.
No matter how small your business is but it is best not to ignore this task, or do it with half-hearted attempts. Both these options are a mistake. If you think you are not good enough to balance your bank account, then you can hire professional help.
With professional making monthly financial statements, you will exactly know where your money is going. This makes things easy. After all, you will have to show your financial records to lenders or investors whenever you seek grants or want financing for your business.
Moreover, you need to have exact details to manage the financial health of your company. You must know if there are customers in debts, or if you have over-burdening balances on your lines of credit. Without proper records, you simply cannot manage the cash flow of your business. Certainly bookkeeping is a way to make sure that your business’s financial house is in good shape.
Outsourcing is investment, generating return for small business with scarce resources
An accurate bookkeeping improves the ability of businesses to focus on business growth while simultaneously curtailing risks and costs. Obviously, there are many Bookkeeping Outsourcing Firms that work for small and medium businesses worldwide. The process of bookkeeping is simple and actually keeps your business in order. All you need is to put aside some of your time for it, and you can notice how your business will flourish.