Bookkeeping for Small Business
Starting a small business is one and managing it is another. It is a dream of any business owner to see the business expand and become something very big. However, the expansion, growth and success of a business does not just come automatically. It requires different approaches and the use of different management skills. One of the areas of a small business that require proper management is the financial sector. This is because finances play an active role in the day to day running of the business. The most effective way of managing the finances of a small business is by having a proper book keeping system.
Bookkeeping is a systematic process of recording and managing all the financial transactions and all the finance related events in the business. It monitors the flow of money in the business and ensures that each coin is accounted for. It records issues relating to sales, receipts purchases and payments in the business.
There are various methods of keeping track of your business bookkeeping. You can use the manual way with a ledger or journal and enter the data by hand or you can avail yourself of the many accounting/bookkeeping packages like MYOB, Quick Books, Xero or any of the others out there.
Why small business should use proper bookkeeping
Small business use the data obtained from bookkeeping to process financial statements and get financial reports. Data from the bookkeeping records can also be used to analyze the financial state of the business. This is because with the bookkeeping records, you are able to tell how much money you are making or loosing. You are also able to evaluate your financial goals and see how your business is fairing.
Bookkeeping will enable small business owners to evaluate whether their earnings can cater for the business expenses. This will enable the business owner to know how to increase earnings by cutting on costs.
Bookkeeping records can also be used as communication tool between the business and the external parties such as banks and government agencies dealing with tax issues.
Having an efficient bookkeeping system set up will enable you to be able to present your books to the accountant at the end of the financial year with confidence and also save your pocket on additional accounting expenses.
Emandor Bookkeeping can set up your books for efficiency as well as accuracy to enable you to stress less and work on your business more effectively.
Bookkeeping tips for small business
- Plan for bigger expenses. This usually involves huge sums of money. These expenses may include upgrading of assets and other expensive office undertakings.
- Record the deposits correctly. Keep track of the cash that is deposited into your business account and record it in the correct way. Also account for the source of each deposit.
- Never try to evade taxation as the penalties may be heavier. Set aside money to pay taxes to lessen the tax burden later.
- Track invoices, ensure that all the invoices are paid promptly and track them keenly.
- Allocate time each week in which you devote to inspect your bookkeeping records. This will enable you to get regular updates and make early decisions.
- Get accounting software like MYOB, Xero or Quick Books or any of the other bookkeeping or accounting software this will set your business up to succeed.
