Bookkeeping is the most fundamental task that a small business must perform or outsource in order to get any advice when it comes to tax or business strategy. You have options for keeping. Either you do it yourself but it is time taking or you can hire a professional bookkeeper on, full-time or part-time basis though it will cost you a fortune.
If you're kickstarting your business, you'd want a cost-effective solution and i.e. virtual bookkeeping, thanks to the web. The best thing about virtual bookkeeping is that it's not location-dependent. You can hire bookkeeper services for small businesses despite their venue.
What is Bookkeeping?
It's the process of keeping a check on your finances without which business is not possible. Bookkeeping tracks your income and expenses, that's it. People like to believe it is more than that because of the plain sight of numbers. But honestly, it's just that simple. To know its importance click here.
How Bookkeeping grows your business?
• It helps your Budget:
When you are properly tracking your business incomes and expenses, it makes it easier to manage your financial resources. Budgeting creates a financial roadmap for your business. So you can save yourself from pitfalls.
• Necessary For Tax Preparation:
Filing tax is unavoidable every year. It's a hassle. The process of filing tax can become easy just by having bookkeeping services in your business. It is important for your personal tax return too. As a business owner, your big part of your income is generated by your business. You must know how much your business is earning to know what you have earned.
• It helps you make better business decisions:
The product of bookkeeping is a financial statement. Financial statements should be regularly prepared and used for decision-making. While reviewing your financial statements, you can track your cash inflows & outflows and overall profitability. Your main goal is profit as an owner. The only way to get them or improve them is useful info I.e, is bookkeeping.
How does Bookkeeping work?
Bookkeeping is a cycle. It starts with a transaction. You could be a buyer or seller here. All the end of the day all transactions impact your books. As a result of this transaction, there should be some types of source documentation, this could be a receipt, invoice, note payable. This documentation serves as a source of info that bookkeepers use to record transactions. Having a monthly bank statement would be a great alternative instead of keeping a receipt with you as an owner.
The next step of your bookkeeping cycle is determining the financial effects of your transaction. This part is a little tricky and is usually, where a professional accountant or a CPA is needed. Every transaction falls into one of these 5 categories: Revenue, Expenses, Assets, Liabilities, and Equity. It is very important to correctly classify each of your business transactions, that you can accurately interpret the financial performance of your business.
So this is the bookkeeping cycle in a nutshell.
Now you might be curious to know what to look for in a bookkeeper for a small business.
Tips for choosing the right bookkeeper
When hiring bookkeeping services, you need to precisely pin down what you need a bookkeeper for? Or what do they offer you? Why your small business needs bookkeeping?
You can hire on monthly basis or there are some services that charge per hour. But it is suggested to go with flat-rate monthly basis because it makes the bookkeeping process more streamlined. There are certain questions you need answers to before hiring bookkeeping services such as:
What accounting do they use cash or accrual?
What exactly is their rate? Will they report review? or ask regarding the transparency to both the parties.
Do they work with other similar businesses or yours?
How available are they?
You should be in a position to make them understand your business process, your industry, and your requirements. Make sure if they are able to meet the deadlines on time. Good Bookkeeping services offer timely reporting with the client, dedicated to financial success, have a detailed eye, and keeping books error-free and up to date.
4. Best Bookkeeping services for small business:
1. Fresh Books:
Price: $15-50/month
Fresh books are incredibly easy to use which is why it is picked as the best invoicing program for small businesses. Its format is initiative and with just a few clicks you can add billable and expenses. You can customize invoice look and are able to set recent invoices. Automatic payment reminders and late fees. Connects your bank, generates several reports. Tracks time and helps manage projects. The fresh book could be ideal for you, if you need to send out invoices, need time tracking capability, or such a subscription model business.
2. QuickBooks Online:
Price: $299/month
It supports 24/7 chat support and integration with PayPal, Shopify, and Square makes this a crowd-pleasing small business software. You can organize receipts, track sales & taxes and run reports. It also has advanced plans that allow you to track inventory, track time, and even run full-service payroll. The parent company was founded in 1983 and this brand is introduced in 2002 with its online presence.
3. Sage100 Cloud:
Price: $99/month
Sage works well for small business to medium-sized business. It is time-efficient. Sage performs administrative tasks & also calculates your taxes. Collaborations and time tracking tools are two things won't get with Sage. Although, it offers job costing capabilities which is a cool feature. It is one of the leading accounting software for business industries.
4. Express Accounting:
Price: $69/month
It has good enough features that match the need of small businesses and it has a free version too. It is a simple tool, use for basic accounting needs with a browser-based add-on that allows multiple users without licensing. Likewise, express account generates basic reports including income statements, analysis cash flow statements, invoices, and balance sheets.
