Small Business Bookkeeping 101

Companies big or small normally have a lot of financial transactions. They need to keep track the flow of their money. The activity of recording and tracking all the financial transactions performed and done by the company is bookkeeping.

Bookkeeping is not only for big companies and corporations. Single individuals and home businesses also need to do bookkeeping. Although small business bookkeeping is a lot simpler than that of large companies, it is nevertheless important.

Just like in big companies, small business bookkeeping involves keeping records of what it sold, bought owed and owned. It is up to the owner to track of the money the business receives, releases and saved.

In small business bookkeeping, it is important to be aware of some simple bookkeeping principles.

Just like big companies, income acquired from small businesses is still considered taxable income by the IRS. So in small business bookkeeping, the owner must keep accurate records of the company's income and expenses.

Another thing to keep in mind when doing small business bookkeeping is that tracking and recording financial transactions is relatively simple with Quickbooks online.  However, if the small business owner doesn't want to spend the time or have the ability to keep accurate financial records, outsourcing their bookkeeping will usually save them money.

Sometimes small business owners will try to use spreadsheets for their bookkeeping because it doesn't require a lot of knowledge to work with. All that is needed is to put all income in one column and put all expenses in another column.  We don't recommend this however, because many errors can be made and it's hard to reconcile when multiple accounts are involved.

Even simple bookkeeping can be difficult. Therefore, it's a good idea for the owner to pay someone to do his bookkeeping for him. Small business bookkeeping is usually a headache for an owner. Owners have other things to do such as marketing their product and services, increasing sales or running the operation. Having someone to do the bookkeeping for him usually eases off the pressure. For an owner who has just established his business, hiring someone to keep track of financial transactions is an easy, beneficial, and smart move. 

Another important thing to keep in mind in small business bookkeeping is to determine the kind of records the owner needs to keep. It is important to keep track of all the income and income-related expenses that the company incurs. These expenses include office supplies, postage, phone bills, internet bills, utility bills, and others. 

Finally, it would also be a good idea for the owner and his hired bookkeeper to attend business-related seminars, especially those that discuss on tax, accounting and inventories. Such seminars are useful, paving way for more efficient and accurate bookkeeping.  Not only that, but these seminars are tax deductible and a great way to network with other business owners.  If you need help with your bookkeeping, the first step is giving us a call.  We will determine your rates based on your backlog, unique business needs, and future goals.  Reach out to us any time at 912-376-9918, or email us for a quote: info@thebeancountersbookkeeping.com.

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