Bookkeeping 101: Everything You Need to Know

You need to get an idea of cash flow, sales, and other entities that involve cash. For instance, are high shipping costs eating into your profit? Bookkeepers record daily transactions, whereas accountants use the information to evaluate the financial situation. An accountant cannot proceed without the information provided and stored by a bookkeeper.

Microsoft Excel has been around for decades but is still used by businesses today because of its accessibility. Excel is useful for several applications, including bookkeeping. Businesses around the world use the spreadsheet-based program. Training on using Excel is also readily available online to get you and your employees up to speed if required. Another reason to use Excel, as mentioned earlier, is that you probably already have it installed on your computer. Using Excel is likely cheaper than hiring a bookkeeper or investing in popular accounting software programs.

Stay on Top of Your Accounts Receivable

QuickBooks offers business accounting essential features, but the platform also offers some advanced accounting features that come in handy when automating your business’s accounting processes. FreshBooks is best for small businesses that are looking for simplicity, strong invoicing, proposals, and good customer support. If you are running a small business, you know that even small accounting problems can lead to major headaches.

Most features are included in all plans, so each larger level mainly adds more billable customers. Accounting software is used by 64.4% of small business owners, which is good because 60% of small business owners admit to not being knowledgeable about finances or accounting.

Expense tracking made easy

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• The business shouldn’t directly pay any expenses of your personal vehicle, even for fuel that will be used entirely for business.
• The world of ecommerce has made it easier than ever to sell to customers outside of your state and even country.
• Cloud-based online accounting software makes it convenient for businesses to access their books at the same time as their bookkeeper or accountant.
• Each program on this list offers essential business accounting features and automations that will make your business’s accounting and payroll processes a breeze.
• In addition, when times are tough, you can ensure there’s money in the payroll account, even if your primary account is overdrawn.
• Look at the item in question and determine what account it belongs to.
• Identify which customers haven’t paid by the due date, and send out reminders and overdue invoices to delinquent customers.

GrowthForce can serve as your outsourced advanced bookkeeping and accounting department. They require very different levels of effort and expertise and as you can imagine, the cost for full service accounting is much higher. However, most businesses that make the leap see the value and experience an ROI rapidly. As a small business owner, you have the option of hiring an accountant, recording transactions by hand or using an accounting software to record your business transactions. Under the cash-basis method of accounting, you record income and expenses when cash transactions are done.

Get Your Invoices Paid Faster With These 10 Tips

If you don’t have your books up-to-date, you cannot calculate your net profit for filing your tax bookkeeping returns. You can only know your total income and expenses with the help of proper bookkeeping.

Customer payment processing and payroll are considered premium services that cost extra, but all of the bookkeeping, invoicing, and reporting features are completely free. Wave is well-developed software that rivals even some paid programs in terms of features. The software covers all of the accounting basics, including invoicing, expense tracking, accounts payable, bank reconciliation, and more. In Wave, users can separate personal and business expenses, which is ideal for freelancers or side hustlers who don’t have a separate business bank account. Small business accounting software ranges from $0 to $150 or more per month. Basic plans are in roughly the $0 to $40 per month range and are a great place to start.

If you want to find out how your company is doing financially, all you need to do is generate a report,” according to Reuben Yonatan, Founder & CEO, GetVoIP. In our increasingly mobile world, all small businesses should be using accounting software instead of keeping track of finances on paper or a spreadsheet. Not only is accounting software more accurate, but it also helps ensure double entries are set up correctly.

• An old-fashioned method of keeping receipts is to have a file folder for each vendor where you place paper receipts.
• QuickBooks Online offers four pricing plans ranging from $30/month to $200/month.
• Bookkeeping software helps you prepare these financial reports, many in real-time.
• While much of your daily accounting work probably involves paying bills, sending invoices, and recording payments, you also need to keep a close eye on your bank and credit card activity.
• You can send payment reminders via email several days before the due date and then again one day after the due date.
• Small business bookkeeping may not be the most exciting activity for a small business owner, but it isn’t one to be ignored.