What should small businesses know about bookkeeping?

bookkeeping for small business

But it is a competitive market, so QuickBooks may not be the top choice for all businesses. Those seeking a bargain may wish to snap up rival brand FreshBooks, for example, where you can claim a 90% off for three months deal now for all new users. Other contenders such as Xero and ClearBooks have plenty of merit for small business owners too. Bookkeeping may become more complex and time-consuming as your organization expands. Hiring a small business bookkeeper will free up your time so you can concentrate on other areas of your company while ensuring your finances are in order. Below are a few reasons you should consider working with a bookkeeper.

Mobile functionality – Being able to access the software on a mobile device allows you to stick to your bookkeeping schedule, even when you’re on the move. This way, you can avoid tasks adding up simply because you didn’t have access to your system. Think about how much you currently owe, how much customers owe you, when payments need to be made or are expected, and how much VAT you’re liable for.

What are the differences between bookkeeping and accounting?

You can learn more in our guide on how to do bank reconciliation. Use your books to track every payment and make it clear when they were made or received so you can easily find them if you need to refer to them later. The following pointers will help you to get started in bookkeeping for your small business. Purchase invoice – this records what you’ve bought and how you’ve paid for each purchase.

What does a bookkeeper do for a small business?

Bookkeepers are responsible for providing accurate, up-to-date financial information about a business. They're always taking the pulse of a business. Most often, their reports go to business owners and managers to help them make decisions. Some bookkeepers, however, are actually involved in strategy development.

You will be able to find information quickly and simply if you keep a record of every payment and make a note of the date it was sent or received so that you can locate it later. Professionals know what they’re doing, and they’ll use their knowledge, skills and experience to put your books in the best financial situation possible. You can count on them to be up-to-date on the ever-changing laws. It’s essential to be aware of your company’s seasonal ups and downs and how they’ll affect your ability to spend during those times of increased or decreased revenue.

We make bookkeeping simple for small businesses

As we are aware that every business has to file for a tax return per year, and most of them scramble through their desks to compile the paperwork. This process can be made simple and easier by hiring an experienced bookkeeper for small business. Sometimes you may become so overwhelmed to realize that bookkeeping is yet another task that has to be done in order to keep business optimally running. The bookkeeping for small business will surely relieve the stress off your head. However, it’s possible to manage your own bookkeeping manually or with an accounting system. We have written a free simple guide to help people who are considering starting a home-based bookkeeping business.

Larger businesses will want to look at a Premium plan which has a capacity of 500 billable clients. If you’re a sole trader, then FreshBooks is one of the cheaper options out there. However, you will also need to remember to keep an eye on any costs lurking below the surface. For instance, https://www.scoopbyte.com/the-role-of-real-estate-bookkeeping-services-in-customers-finances/ they provide an accounts payable functionality on their lowest tier w/ no restrictions, as well as a project accounting functionality. It also includes many other useful accounting features, including enabling users to track their billable hours and add them to invoices.

What is double-entry bookkeeping?

Go above this, and you’ll need to start paying for the Standard plan. It’s a steep increase, especially given that the Standard plan offers no other extra features. Many small businesses or sole traders use accountants or accounting systems to accurately record their bookkeeping.

bookkeeping for small business

I’m too busy running my own business to worry about which software is best for my industry and how to set it up correctly. Stacey implemented Xero for my business so all I have to do is photograph my receipts, they do the rest. Clever bookkeeping is about having a broad understanding of the entire picture.

Income statement

You might do bank reconciliation daily, weekly, monthly, or less often, depending on the number of transactions going through your business. However, you will probably be required to reconcile your books before submitting tax returns at the very least. The three most important financial statements you should think real estate bookkeeping about are the balance sheet, the income statement and the cash flow statement. Knowing how to manage cash in a small business is a key skill for any founder. The good news is there are solutions to make life easier, such as outsourcing some of the burden to an accountant or usingcloud accounting software.

Block frequent time out in your calendar dedicated to each task and set them to reoccur at the intervals they need doing . It’s ultimately your responsibility to understand which applies to you, and how and when to submit your tax return to HMRC. There are many reasons this might happen, but from your point of view, it can’t go on too long. Delays to money entering the business can impact how flexible you can be, and even prevent you from making basic purchases. While the list of tasks might seem long, you’ll be surprised by how quickly it becomes second nature. Ultimately, it’s up to you and how comfortable you are with taking responsibility for these processes.

You only need this service if you want us to complete the bookkeeping on your behalf. There are many high-quality solutions out there that will help you achieve all this. And when you consider the monetary value of the hours you’d spend doing bookkeeping on paper or using generic tools like spreadsheets, software is often incredibly cost effective. Any form of digitisation will bring you benefits but using dedicated software for your bookkeeping makes it significantly easier, as so much of it can be automated . It’s also a good idea to ask how you can support them in pushing it over the line – whether that’s allowing them to pay a different way or splitting payments into smaller chunks.

Do small businesses do their own bookkeeping?

A small business can likely do all its own bookkeeping using accounting software. Many of the operations are automated in the software, making it easy to get accurate debits and credits entered.