Owning a business in one hand and looking after the bookkeeping and accounting for the same on the other hand seems to be easily achievable at first instance. Although bookkeeping and accounting looks like one of the parts of the business which can be easily handled along with other essential things, it is altogether different and demanding to maintain concise finance details.
It becomes trickier when you find yourself handling the promotion of your business, looking after sales and marketing of your products and managing admin and HR all at once. It becomes even more difficult if you have to look after the financial details of your company amongst other more crucial work to be done in the pipeline. What action can be taken, let’s have a look.
Plan beforehand when bookkeeping for small businesses
Watch for your expenses: Small business owners can keep track of their expenses on a daily basis by keeping the receipts in a dedicated file or folder or an envelope.
Watch the worth of your money: Working hours should be calculated for an exact tracking of productivity. It is a good practice to calculate the salary on an hourly basis and calculate how much you should work to balance your home and work.
Be financially stable: to have the courage to take the required financial risk involved in running a successful business.
Bookkeeping and Accounting – Is it for me?
The owner of a small business may ask this question to himself: “Are bookkeeping and accounting necessary for a venture as small as mine?” It would be a big mistake to think that accurate bookkeeping is not necessary for a small business. It is a good idea to chalk out the points by having a meeting with an accountant to see why small business bookkeeping is important for a company’s growth and why it is a good idea to make a firm an incorporated one so that it sounds more professional and everybody else takes it seriously as an organization.
Importance of Bookkeeping for a small business
It would be like sailing in a boat in the ocean with no aim to reach anywhere. It is mandatory for a small business to keep an accurate record of accounts to track the growth of the company. Small business owners normally adopt the cash accounting method, i.e. counting income when cash is received and counting expenses when cash is paid. The more widely used method is accrual accounting in which income is counted when a transaction is done, irrespective of receiving the cash, and expense is counted when consignment is received. Properly managed accounts are always helpful for filing the taxes in the year end or to obtain loans when required.
The biggest mistake that a small business owner makes is to try and maintain the accounts on his own resulting in diverting his efficiency and time to less important things instead of finding new clients and building business. Outsourcing bookkeeping and accounts will ensure:
Helping the sole entrepreneur make strategies to guide the business towards maximum profit, height and growth.
Accurate tracking of profit and loss reports, balance sheets, paid and unpaid bills and receipts and tax receipts are the most important points in assuring that the business in on the right track and will soar to greater heights in terms of success and growth.