How to Start Your Own Bookkeeping Business: Essential Tips

Small Business Bookkeeping Tips

There are many resources to help you manage bookkeeping for your small business. What was once the domain of specialized professionals can now be carried out by entrepreneurs of all experience levels in any industry. Though often used interchangeably, bookkeeping and accounting are distinct functions. Let’s review some tasks involved in bookkeeping, especially as they relate to your business’s day-to-day operations.

Small Business Bookkeeping Tips

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In this article, we’ll go over the fundamentals of bookkeeping, as well as what you’ll need to implement a bookkeeping system for your business. Calculate how much you’ll pay in Square fees for online, in-person, and manually-entered payments. Calculating Stripe fees for customer payments is easy with our calculator. Enter the payment amount to calculate Stripe’s transaction fees and what you should charge to receive the full amount. As you establish the financial side of your business, here are five best practices to keep in mind when creating a functional bookkeeping system. If Bench does your bookkeeping, you can also upload and store as many digital receipts and documents as you’d like in the Bench app.

Outsourcing to a professional

You should be able to link your bank account or credit card to any good accounting software. The software will then track your income and expenditures, categorize them, allow you to send and pay invoices, and generate reports. QuickBooks even has a ProAdvisor program to help you find small business bookkeeping a local QuickBooks expert if necessary. Loans, revenue from sales and other cash infusions are easy to lose track of, but you need to keep tabs on all your incoming cash flow. If you don’t, you could end up underpaying your taxes, and that can lead to avoidable IRS penalties.

Small Business Bookkeeping Tips

Fund Your Business

Planning for major expenses can help you best utilize the business credit and resources available to you while giving you peace of mind. Hattrup encourages all of his clients to address little details from day one in order to start off on the right foot, such as transferring internet bills from a personal to a business credit card. If you’re a busy small business owner with a million things to do, it’s easy to let bookkeeping fall by the wayside. Under double-entry bookkeeping, all transactions are entered https://www.bookstime.com/ into a journal, and then each item is entered into the general ledger twice, as both a debit and a credit. Accounting software makes it possible to do much of this on your own, though you may decide to outsource some basic bookkeeping tasks to an online bookkeeping service as your small business grows. Business accounting and reporting standards vary slightly from province to province, so it’s important that you find a bookkeeper that’s based in the same region where you’re operating your business.

You’ll officially create a corporation, LLC or other business entity by filing forms with your state’s business agency―usually the Secretary of State. As part of this process, you’ll need to choose a registered agent to accept legal documents on behalf of your business. The state will send you a certificate that you can use to apply for licenses, a tax identification number (TIN) and business bank accounts. A professional will keep your records up-to-date and orderly, and a pro is better equipped to know about potential fees, loopholes, or additional tax deductions for which you might be eligible. Understanding different IRS provisions and requirements can help you get tax advantages and save time. In fact, the average small business owner can bring in about $320,000 in new business annually by offloading accounting responsibilities to a pro.

Small Business Bookkeeping Tips

There are several key elements that are typically included in a comprehensive business plan. Here’s what yours might look like as you draft a plan for your bookkeeping business. Any cash received should be paid into the business bank account or petty cash before spending it. A business owner needs to know and recognize what type of expenses can be claimed against the profit to reduce tax, and what can’t be.

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  • The value of inventory can significantly impact a company’s financial statements, so accurate tracking and management is vital.
  • You can also look into government-backed loans, such as those offered by the SBA.
  • Of course, this does not apply if the business is operating on a cash basis without extending credit to the customers because the cash will be coming in at the time of sale.
  • Don’t forget to save money for office supplies, inventory, maintenance, and repairs.
  • Certain payment funds, including payments made by credit card, are temporarily held during payment processing by Silicon Valley Bank, a division of First-Citizens Bank & Trust Company.
  • Likewise, you don’t need to have experience running a business, but that could also prove helpful.

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