Bookkeeping for Small Business

Document Sample
Bookkeeping for Small Business Powered By Docstoc
					                     Hassle Free Bookkeeping for Small Business


      Bookkeeping for a small business http://frankguttacpa.com/business-
tip/bookkeeping-for-small-business can be a confusing and a time consuming job,
unless you have an experienced bookkeeper to help you. The role of a bookkeeper
is to organize and manage the financial records of a company - from keeping
invoices and receipts, detailing accounts payable and receivable, tracking of
expenses and income, employee’s payroll, tracking of inventory, calculating sales
and payroll tax amounts and keep general ledger records updated for your
accountant.


      It is critical for all business ventures to have a bookkeeper, in order that your
time and energy can be focused on running and building your business. But maybe
you are considering doing your own bookkeeping?


      For an entrepreneur considering doing the bookkeeping, the following are
some options to effectively get the job done.


      Bookkeeping Software. A bookkeeper in a small business should have a
keen sense of detail and sharp organizational skills. Errors and/or miscalculations
in bookkeeping for your small business will hurt your chances of success by
providing misleading data or misrepresenting how your business is doing.




                                                                                     1
      If you have been trained as a bookkeeper, and you feel you have the time to
do it correctly yourself, then you will definitely save money in the short term.


      However, in most cases your time can be better spent with greater return
focused elsewhere than countless hours maintaining bookkeeping ledgers and
accounting files.


      You can purchase software intended for small business bookkeeping which
can help make the job easier. Successful bookkeeping is as much about
organization and planning and these software systems can help organize your
financial affairs. Necessary bookkeeping tasks like payroll, Sales tax calculations,
tracking of expenses, and payable and receivable accounts can all be accomplished
with bookkeeping software programs.


      There are several software packages available depending of the degree of
your need, size your of workforce, and the nature of your product.


      A note of caution with bookkeeping software though, no matter what they
claim, they still require a great detail of time, accuracy, and up-to-date inputting of
your financial transactions.


      In House Bookkeeper. Hiring an in-house dedicated bookkeeper is another
option that might be appropriate for your business. In house staff can be expensive
especially for a small business, but the advantage is the convenience of having the
bookkeeper readily available every workday. If your business is not ready for a full
time employee, you can opt for a part time bookkeeper.

                                                                                     2
      Having an experienced bookkeeper preparing your bank reconciliations,
payroll & sales tax reports and maintaining your general ledger will save time and
prove more effective.


      The disadvantage of an in house bookkeeper besides the high cost is that you
have added an employee that requires management. An in house bookkeeper can
also accomplish other functions in your business aside from what is in their job
description, helping with reporting, human resources, number crunching etc.
However, before hiring an in house bookkeeper, do a thorough background
investigation.


      Follow up with previous employers and ask for referrals. Check the
credentials and certification of your new employee. The new bookkeeper will be
privy to the intimate details of your business and it is critical that they are both
knowledgable, effective, ethical and trustworthy. It is important that you work
comfortably with your bookkeeper.


      Outsource Bookkeeping Solutions. In addition to software, the internet
has a number of online services that allow for the drudgery of your bookkeeping to
be outsourced.


      As a business owner you can outsource your payroll tax and related filings,
receivable collections, and other accounting jobs. This strategy to manage your

                                                                                  3
business effectively provides convenience and time freeing you up to concentrate
on improving other areas of your business.


      The disadvantages of an outsourced solution to bookkeeping is the risk of
lack of control and the loss of the day-to-day operational knowledge an in-house or
part time bookkeeper would provide.


      If you are just starting, bookkeeping for your small business may only
involve basic tracking of income and expenses and accurately recording financial
transactions of your company. This will provide you balance in your accounts and
will give you accurate financial data and revenue feedback pertaining to your
company.


      Penalties for underestimated tax amounts alone are very costly and
detrimental. It is important that you have a least a slight knowledge of correct
bookkeeping procedures that will help you avoid late filing and other penalties.
Accurate, timely bookkeeping will give you confidence in the handling of your
finances and the direction of your business.


      Set yourself up for success, make sure your books are kept professionally
from the start and give your business the chance it deserves.


       To continue reading the rest of the article and find out our
recommendations, please click here: http://frankguttacpa.com




                                                                                 4