If your accounting system isn’t able to scale as the business grows, it can lead to business overwhelm, financial complexities and potential financial mismanagement. When checking your processes for scalability, I recommend paying special attention to your cash flow management and business forecasting. Bookkeeping involves the day-to-day recording of financial transactions, which includes documenting sales, expenses, payments, and receipts. Bookkeepers ensure that every financial transaction is accurately recorded in the business’s books, keeping an organized system to track financial activities. Centuries ago, businesses would record their financial transactions in a physical book called the general ledger (GL).

• You can record transactions by hand in a journal or a Microsoft Excel spreadsheet.
• We’ll walk you through what you need to know about bookkeeping basics.
• Some additional services you may have access to include inventory tracking, BillPay, CFO services, and tax services.
• The customer is more likely to pay fast, given that the service is fresh in their minds.
• Set a date early enough each month to give you time to prepare the paperwork.
• This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business.
• If you’re going to be doing your own bookkeeping, it’s worth talking to a pro when you set up your system to make sure the accounts you create align with your industry standards and CPA expectations.

Bookkeeping Tips: 15 Things Every Small Business Needs to Know

Bench is a popular small business choice because it’s an affordable bookkeeping service with an intuitive, easy-to-use platform. Bench gives you at-a-glance visual reports, which provide you with actionable insight that’ll help grow your small business. Another bonus is that you get to communicate with your bookkeeping service team via chat easily. In addition, Bench has raving online reviews and many integration options.

• Running a small business comes with many responsibilities—and keeping accurate financial records is one of them.
• A safe way to protect the cash flow is to track how long it takes for the clients to pay the invoices.
• Every time you perform a financial transaction—for instance, make a sale, accept a client’s invoice, or pay a bill—you should record that transaction in your general ledger.
• You’ve used your entrepreneurial prowess to produce a product or service that your customers need.

Step 10: Implement Your Processes

When you get back to your car, office, or couch, you’ll find that the data on that file gross vs net has been automatically extracted, parsed, categorized, matched, and stored for future recall. Depending on which software solution you choose (see step 3), you’ll do this manually, or you’ll automate it. The first step is to familiarize yourself with some essential bookkeeping concepts.

Keep Personal and Business Costs Separate

You will likely want to establish a business banking account and credit card. This can help you keep your own business expenses organized and separate. If you plan to hire employees, such as an administrative assistant, you may also want to seek a small business loan. If you seek funding from a bank or investor, your business plan will be especially important because it is how potential lenders and investors will understand your business.

Prepare financial reports

Consider asking fellow business owners or industry professionals for recommendations. Analyze the size of your https://www.bookstime.com/ business, the volume of transactions, and the complexity of financial tasks. This will help you determine the type of services you require from a bookkeeping service.

From avoiding costly mistakes to freeing up time and resources for business growth, outsourcing your bookkeeping tasks is a wise investment that can save you money in the long run. Furthermore, a professional bookkeeper will not only record transactions but also analyze data such as cash flow patterns and expenses. Yes, you’ll need to determine how you want to manage your books, such as the do-it-yourself route, such as Excel spreadsheets, or use accounting software like QuickBooks. Alternatively, you can outsource your bookkeeping or hire a part-time bookkeeper.

You can always attend professional events, too, such as conferences and networking events. Don’t forget that investing in your business means investing in yourself. There are two pieces of the business plan that deserve a little extra consideration. While it’s not required for bookkeepers to specialize in a niche, many choose to do so for marketing purposes. If you focus on a specific industry, you can gain referrals from others within the industry Bookkeeping for Any Business Industry and join industry associations.