Bookkeeping for Small Business Simple 5 Step Guide to Get You Started
Small business owners need to prioritize accounting and other financial management related tasks. After establishing the business and getting the very first clients, it is time to start preparing accounting ledgers. Never ever stuff the first few bank statements and invoices in a shoebox or ignore electronic financial statements. The first order of the day should be to create an organized financial accounting system with help of a first rate expert such as IBN Bookkeeping Services.
With these professionals your accounts can actually be maintained easily and does not involve too many complexities. Bookkeeping services for small business are a good idea in order for the business to thrive and develop further.
Bookkeeping Made Easy With 5 Simple Steps
1) Decide between cash and accrual accounting: Basically in cash accounting, transactions are only made note of when money actually passes from the buyer to the seller. So, if the service was provided in June, invoiced in July and payment was only made in August, the transaction would be made note of in the accounting books of August. Whereas, in accrual accounting, transactions are made note of when the expense is incurred or when the actual service is provided, regardless of when the payment has been made.
2) Keep separate business and personal bank accounts: Now, big corporations are required by law to maintain separate bank accounts and their business is treated as a separate independent entity. However, this is beneficial even for small business owners and will make things easier when distinguishing between personal and business expenses. Also, maintaining a business-only bank account adds to the professional image of the business owner and makes it simple to figure out if the business is running successfully or not.
3) Choose a single accounting software: Accounting specific software is a useful tool when it comes to handling bookkeeping work, especially for small business owners. There are apps like Invoice Ninja which are handy for billing customers but there are lots of functions that it can’t carry out.When selecting accounting software, think about what features, help and support resources, data security will be required the most. Consider the fees which will be charged, its synching ability, ease of mobile access and acceptability to the tax authorities.
4) Hire an accountant or outsource bookkeeping activities: Bookkeeping for small business can be a real life saver! It can free up time which can be put to better use for handling other activities like marketing and day-to-day operations. Also, trained bookkeepers will be able to identify accounting errors much faster and will also be able to handle all the paperwork that comes along with maintaining books of accounts. IBN Bookkeeping Services is one such bookkeeping service provider with industry experienced bookkeepers and accountants competent enough to handle all accounting needs such as bookkeeping services, tax preparation services as well as payroll processing.
5) Maintain an organized system: It is essential to maintain proper records, either on paper or electronically. This makes it easier to keep track of all the cash that is flowing out of or into the business. At the end of every month, it is important to go through the accounts maintained and check that the amount in the firm’s bank balance is accurate. It is best to opt for outsourced bookkeeping services as day-to-day accounting can be left to them and will only prove to be more beneficial in the long run.