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As a small business owner, you likely wear many hats. From manager to marketer to one of the most time-consuming roles, the bookkeeper. But as your business begins to grow, bookkeeping becomes more complicated and tedious. Read on for more information and basic bookkeeping tips to save you time and unnecessary headaches.
What is Bookkeeping and How is it Different from Accounting?
Although bookkeeping and accounting go hand in hand, it’s important to note the differences between the two terms. Bookkeeping is the process of managing all of the day-today financial transactions of a business such as sales, payroll, reconciling bank statements, and payment of bills. Accounting is a more in-depth process that uses bookkeeping information to verify and interpret data. From this data, an accountant can provide you with reports, assist with tax preparation, forecast trends, and give you big picture financial insights into your company that can help you make critical business decisions and identify opportunities for growth. Depending on the size of your business, your accountant may also handle the bookkeeping tasks.
While you may be able to manage your business’s bookkeeping duties on your own, you will still need an accountant for financial advice and expertise. An accountant stays up to date with the latest changes in tax legislation and can ensure that your deductions are maximized and that your tax paperwork is properly filed.
Basic Bookkeeping Tips
Here are 3 basic tips to help you better manage your bookkeeping.
Utilize the Right Bookkeeping Software
There are countless paid and free options to choose from when looking for the right bookkeeping software for your small business. Each option has pros and cons, so do your research and make sure to evaluate what the most important features are for your company. Here are some of the most popular bookkeeping software for small businesses:
There’s a reason QuickBooks has over 7 million customers globally. They offer several different plans starting as low as $12.50/month. Some of the major benefits of QuickBooks Online are:
According to their website, FreshBooks claims that “192 hours each year can be saved by using FreshBooks”. The software boasts the following benefits:
Wave is an excellent free software solution with basic features. If you’re a freelancer or a small business that doesn’t need payroll, inventory tracking, or third-party integrations, Wave may be adequate for your needs without having to cough up any money at all.
Maintain Accurate Daily Records
Even though you may be busy, it’s important never to let bookkeeping tasks pile up. You’ll risk losing sales receipts and other important documents that are vital to keeping accurate records. Make it a point to allot a certain amount of time everyday to review your records, log expense receipts, and reconcile accounts. If you don’t stay organized and on top of bills and payroll, you can harm the financial health of your business in the long run.
Recognize When it’s Time to Hire a Bookkeeper
When a business is just starting out, it’s common for entrepreneurs to handle a lot of the bookkeeping tasks themselves. But, as you grow and things become more time-consuming and complex, it may make sense to hire a bookkeeper or outsource some of the bookkeeping duties. If you find yourself spending a lot of time running payroll or paying bills and your time can better utilized elsewhere, consider finding some help.
SBG Funding can help you seize opportunities and scale your business with access to financing that is not limited by the same time-consuming, stringent regulations as traditional banks. For more information about how we can help your business grow, click here or call us at (844) 284–2725.
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