Bookkeeping Basics for Small Business OwnersNumbers Pro
When you buy a new car you want reassurance that you scored a great deal.
You’ll probably listen to the engine sounds, check the oil, check the tires and much more.
It’s unlikely that you’ll pack it away in your garage or check on it every second.
However, as you keep using your vehicle, you’ll naturally keep performing certain checks to make sure your car is still in good condition.
In the same way, small businesses need bookkeeping services when they’re starting.
However, the business’s bookkeeping needs are likely to change as your company scales and grows.
For this reason, many business owners get confused, wondering whether they should hire a bookkeeper as soon as they start operating or wait for the business to grow.
To help clear the confusion, it’s important that you understand the following first:
- What is bookkeeping?
- Some of the basics of bookkeeping
- Why bookkeeping is essential for small businesses
- Hiring a professional bookkeeper vs doing it yourself
What Is Bookkeeping?
A majority of business owners are people of tactical shrewdness. They can see loopholes where a greenhorn wouldn’t.
They can also be masters at creating exceptional services or products.
Entrepreneurs can also excel at capturing the attention of prospective customers and also build brilliant teams for their business.
However, while they might excel at making money, many have a tough time getting a grip on accounts and bookkeeping.
For this reason, it pays to start with the basics.
Bookkeeping is the process of keeping a complete record of accounting transactions in a business.
In general, bookkeeping allows you to know what is happening with the money you are making.
Whether you decide to hire a professional or do the bookkeeping yourself, it’s imperative that you understand the basics.
After all, knowing the basics will help map out bookkeeping for you if you decide to do it yourself, and will also help you understand your bookkeepers work if you choose to hire one.
Not sweating the small things like knowing the basics of bookkeeping could have catastrophic consequences.
Here are a couple of bookkeeping basics for business owners:
- Single Entry & Double Entry: Single entry and double entry are both methods used to record transactions in bookkeeping.
The single entry method is an excellent fit for small businesses, whereas the double entry method works best for larger firms.
- Cash Account: The cash account works well for small businesses, especially for sole proprietorships.
The cash account is used to record all transactions where there is an exchange of money.
- Equity: This account records the level of investment the business owner has in the company.
Why Is Bookkeeping Important For Small Businesses?
Should you keep books for your small business? Yes, you definitely should. If you’re in business for success, then bookkeeping is a must. Why?
Because proper bookkeeping paints an accurate picture of all the finances of your firm – from the money you pay out to the cash you spend from your pocket.
Accurate bookkeeping also shields your company in the event of an audit or disputes.
Bookkeeping also plays a significant role in helping you get investors when you need to grow your business.
Bottom line, efficient bookkeeping smooths out all aspects of your business.
Hire Professional Bookkeepers
Small businesses can be quite demanding despite their size.
More often than not, the owner’s time and energy will be spent on trying to increase revenue and bringing in new customers.
For this reason, you should hire a professional bookkeeper to help with the books while you concentrate on growing your company.
Professional bookkeepers have access to numerous types of bookkeeping software and systems plus the experience and knowledge to help with your bookkeeping needs.
So even if you understand the basics, it pays to work with a trustworthy expert adept at bookkeeping.
If you are looking for a blend of truly personal service and expertise, please call us today on 03 9510 2120 or contact us through our website https://numberspro.com.au/contact-us/