Small Business Blog

Posts Tagged ‘Bookkeeping’

If you are a person who enjoys working with numbers and keeping them balanced, bookkeeping may be a great thing to pick up. And if you hold the qualifications for it, starting your own small business bookkeeping services can be a great way to earn money, since you would not need to split the earnings with others. Plus, starting one does not cost much, so you can begin with it as a part time service. Here is a guide to starting your own small business bookkeeping services.

First of all, you will want to prepare the necessary supplies for your office. You would need filing cabinets for all the documents, as well as bookkeeping software to make simple the bookkeeping process. Do get other office supplies as well that would help get the job done efficiently, such as stationeries, fax machines, and photocopier. In the meantime, find out what other professional bookkeepers in the area are quoting their clients so you can get an estimate to how much you should roughly charge your clients.

When you have just begun, you should charge by hour instead of charging by month. This enables you to identify the type of accounts you tend to attract, before considering your rates based on the type of work you typically get. Bookkeepers tend to charge between and an hour, although most customers prefer paying a flat rate for a month’s worth of bookkeeping. These can range between 0 and 0 a month.

You should set certain goals that you should follow through in order to sustain your clientele. Always be meticulous and accurate in the work you do, and make sure you deliver them on time. Being in a business yourself, you would realize that other businesses rely on bookkeepers to keep track of or update their reports on important things such as invoices and profit statements. As these reports are necessary for the IRS to follow through, clients will want to have a reliable and trustworthy bookkeeper.

Where attaining clients is concerned, it would be wise to do some networking amongst other business owners. Get in touch with local organizations or trade groups like the Chamber of Commerce or Business Networking International (BNI). As you would like to make a name for your business, invest in name cards so you can easily distribute them when you meet new people. Another tactic to gain clients is to volunteer your service to some organizations where you are likely to gain abundance of contacts.

Lastly, if you want to stand out among other bookkeepers, be educated. Learn how to do more than bookkeeping, such as preparing taxes or becoming a bill collector. With such versatility offered, your clients would be happy to acquire the service from the same place.

Every business whether big or small has to maintain their financial records. Therefore, it is no doubt that bookkeeping business is a lucrative business. This type of business requires low start capital and the barrier of entry into the business is low. Virtually almost everyone with sufficient bookkeeping experience,skills and interest can start their own bookkeeping business from home. Check out the following benefits and see whether the business is for you:

i) Low start up capital – the cost of opening your own bookkeeping business from you can be very low. You need only a personal computer, a printer and a user friendly bookkeeping software. These items may cost you from ,000 – ,000 depending on your budget.

ii) Work at your own hours – you can work at your own hours especially if you are a stay at home mom. If you start your business from home, you can choose as long as you want because you are building your own business. In addition, working from home means you don’t need to spend time travelling to and from your office and hence saving time and money.

iii) Make more than working for others – if you were to provide bookkeeping services to small business owners, you will be easily earning more than per hour compared to perhaps per hour if you were to working for other bookkeeping or accounting firm. So starting bookkeeping business from home gives you the opportunity to earn more than what you are getting from working 9 to 5.

iv) Demand of bookkeeping services – the demand for your bookkeeping services is huge as every business whether it is big or small has to maintain proper financial records either for tax filing purpose or for management purposes. Hence, if you were to start bookkeeping business from home, it will be easier to get clients compared to other types of business whehter getting enough clients can be hardest part of the business.

If you are an experienced bookkeeper and thinking of starting bookkeeping business from home, you should give it a try as the business is considered on of the most profitable business on account of the low start up capital.

It is a known fact that running a successful business requires a lot of planning and strategizing. Managing a successful business is not a child’s play and requires a lot of expertise in various fields related to the business. In addition, the fact remains that one has to strategize things first and then follow those plans and strategies regularly to make the business come out as a winner. Bookkeeping is one such strategy that is adopted by each and every business, whether large scale or a small scaled one. Bookkeeping is a process wherein all the business transactions of the firm are recorded in a systematic manner to make things easier and more regular in the firm. Small business bookkeeping includes the tracking of the total revenue, profit, loss and expenses incurred by the company, the dates of the transactions and various other minute financial details. Small business bookkeeping is in fact, one of the most vital aspects of a business and requires highly experienced people who can give the best to the business. In fact, small business bookkeeping has to be more accurately maintained because for a small business it is important to keep a track of even the smallest financial transaction to know the financial stand of the business.

Keeping a track of small business bookkeeping has many advantages. These advantages can be highly beneficial to a small business. As bookkeeping helps the business to know the accurate financial status, small business bookkeeping also helps these small businesses to know their accurate financial position, which further helps them to understand the position of their business and to understand the initial profit and loss that the business is incurring. Maintaining small business bookkeeping helps the small business owners make their business financially and legally precise and accurate.

A small business needs to strategize things even more because they have a huge scope of growth. Traditional small business bookkeeping that has the details like the daily transactions, turn over, loss, if any and other such details can help these small businesses get loans for their business easily. Generally, small businesses tend to apply for loans to expand the business and securing a loan is not an easy job. To secure a loan one has to be very specific with the details like the various financial transactions that the business had incurred for a certain period of time.

Keeping a track of the small business bookkeeping is also a great task like maintaining bookkeeping for any big business. Therefore, it is always advisable to get professionals who are thorough with their work even if the work is being done for small business book keeping. Hiring accounting professionals to do small business bookkeeping helps the business to understand their financial position and then helps the business to grow and they can keep a good track of the book keeping of the business.

Small business bookkeeping should be done on a regular basis because it helps to maintain the financial records of the business. Moreover, the transaction books should be updated daily and maintained on a regular basis and even the smallest of transactions should be included in the records.

There is a major difference between sophisticated accounting software used by larger businesses for financial control purposes than is required for small business where a simple bookkeeping spreadsheet is sufficient.

An accountant needs to not only ensure the financial records are accurate but also retrieve any part of the accounting records to answer accounting questions on the accounts, provide a legal basis for the transactions and report the financial statements at regular periodic intervals.

Accounting is a term that embodies a whole raft of financial activities while bookkeeping is specifically literally the keeping of books of account. For non limited companies that do not need to produce a balance sheet then a simple income and expenditure account can be produced much simpler using single entry bookkeeping principles.

Less financial control is often required from small business accounting software as the bookkeeper is often the owner manager who already has an intimate knowledge of each transaction. Books are still required for tax purposes and a solid requirement of preparing a set of financial books for tax purposes is that each entry is supported by third party evidence.

The prime accounting documents providing back up are sales and purchase invoices or receipts and bank statments. Financial transactions where no receipt exists can still be entered in the business books although all transactions not carrying third party evidence could subsequently be disallowed for tax purposes and certainly would be if the amounts entered indicated unusual income or expenditure.

Producing an income and expenditure statement using single entry bookkeeping is little more than making two lists of financial transactions. Those lists being one of sales income received from sales invoices or receipts issued to customers and the other of purchase expenditure being from purchase invoices received from suppliers.

To record sales income it would not normally be sufficient to simply add up the total of the invoices as such a summation does not leave an audit trail of the items which have been included. A written list of sales invoices does provide an audit trail.

Sales accounting for a small business accounting purposes can be either a manual list of the sales invoices or by using a spreadsheet package a list can be made on a bookkeeping spreadsheet. Basic formulae canh be used to add up totals in a bookkeeping spreadsheet.

The essential information to enter for a sales invoice would be the date of the sale, name of the customer, sales invoice number if applicable and optional a brief description of the item sold. In the next column would be the total sales invoice amount. Additional columns might be required to account for taxes on sales such as vat in the uk or sales taxes.

A further small complication might be if at the discretion of the small business owner additional information was required from the bookkeeping records to indicate the totals of the different types of products and services then additional columns could be incorporated to enter the net sales figures in these columns.

There it is then, a simple list of sales invoices to satisfy the sales accounting requirements for a small business where a balance sheet is not required.

On the expenditure side of the business the bookkeeping can also be a simple list of the purchase invoices and receipts showing the amount spent. The list should also produce an audit trail by showing the date of the purchase invoice, name of the supplier, purchase invoice for identification purposes and the total amount spent.

Usually tax returns are the main purpose of producing small business accounts and invariably some analysis is required to show what the expenses have been spent on. The small business owner can insert additional standard columns to the bookkeeping spreadsheet.

The expenditure analysis columns do not need to be a different column for each type of expenditure. It is better to set up and group the analysis columns in general headings which can accommodate all the expenses.

These bookkeeping analysis columns would include stock, other direct costs, premises costs, general administrative costs, transport and delivery costs, repairs and maintenance, travelling and hotel costs, motor costs, bank and legal costs and other expenses. It is better not to enter too many items under a general heading of other expenses as this is more likely to be investigated as the type of expense has not been precisely identified.

One important column to also include is for asset purchases as fixed assets usually have different tax rules applying to the claim of the expense against tax and should be separated from other expenditure.

Having set up two bookkeeping spreadsheets the task is then to produce the income and expenditure account by collecting the totals of each of the analysis columns. The sales total is the sales turnover from which is deducted the totals of each of the expenditure classification totals with the result being the net profit and loss of the business.

Where stock is bought and sold a further adjustment may be required to account for the difference between opening and closing stock. This is done by taking a physical stock check and valuing the stock at the start and end of the financial period.

On the income and expenditure account adjust the stock purchases figure by adding the value of the opening stock and deducting the value of the closing stock. The result is not the stock purchases total as shown in the bookkeeping spreadsheets but the cost of the goods which have been sold to produce the sales turnover being reported.

Simple bookkeeping for a small business accounting purposes can be two lists of sales and purchases supported with sales invoices and purchases invoices.

Get the right small business bookkeeping software and you will save time, money and stress. Now up to a point a manual bookkeeping system is all you need. One good manual system is the Dome Simplified Monthly Bookkeeping Record. You can pick this up at Office Depot or Office Max. That will even work OK with a couple of employees. But if you’re ready to step up to a computer system, you face a flood of products to pick from. Following are 7 tips to help you choose the best bookkeeping system for your small business.

Tip 1: Decide what you want.

If you’re upgrading from a manual system or switching from a bookkeeping service, there must be a reason. Decide what you want from a bookkeeping system and you’re more likely to get what you need. The best system should save you money.

Tip 2: Free might work.

A free system might work. Microsoft offers a free version that’s limited, but may be good enough. Usually if you have any employees a free system isn’t for you. But if you don’t have employees, consider the Microsoft free option.

Tip 3: Simple will work.

Buy more system than you need and you’ll pay hidden costs. Learning any system and using it is part of the continuing cost of software. An overly complex system will cost you as long as you try to use it. Simple is good if that’s what you need.

Tip 4: Software in a box.

Look at the major accounting software suppliers like QuickBooks and Peachtree. They sell software in huge volumes and there are thousands of users who have gone before you. No need to be a pioneer.

Tip 5: Easy upgrades.

Cheap software may be a dead end. If you ever need to upgrade, is there an upgrade version or do you get to start all over with a new software vendor? Maybe you can’t even easily transfer your records to the new software. Oh my!

Tip 6: Online for less stress.

Online software may be an option. Especially for payroll, you can forget about keeping up with endless regulation changes and just let the software people worry about that. Lots of bookkeeping automation is available really cheap with online accounting software.

Tip 7: Who can you call?

What happens when you have problems? Who can you call? Software has been known to just lock up and there you are. So know who can help you if you get in trouble, because trouble will come with any software.

The right small business book keeping software makes running a business easier and less stressful. The problem in choosing the best software is you have so many choices. Think through what your real needs are before you buy anything. Pick overly complex software and you’ll pay too high a price in learning and using the programs. But on the other hand, buy too little system and you may find yourself stuck and forced to learn a whole new system. The good news is that you have several options from major companies that are already used by thousands. You can easily buy a proven product that will do the job.