27 Apr
Bookkeeping for a small business requires skill and understanding of the bookkeeping functions it takes to run a business financially. Many small business owners are easily overwhelmed when it comes to bookkeeping, yet numerous resources and tools can make small business bookkeeping easy and manageable.
What is bookkeeping?
Simply stated, bookkeeping is the system of recording your business’s financial transactions, typically in a physical set of “books.” These ‘books’ present your business in terms of financial health, tax status, the ability to pay bills, borrow money, and make decisions regarding operations, investments, and other financial decisions.
What should a small business owner know about bookkeeping?
Bookkeeping is a must—the dangers of not doing bookkeeping stretch far beyond the financial impact on your business. If you don’t do any bookkeeping, or just for the sake of argument, you do some bookkeeping; you are running your business with blinders on. The absence of a clear understanding of your business’s financial health can seriously affect decision-making regarding hiring, purchasing, and other financially related decisions.
- Schedule time for bookkeeping. Even with an outsourced bookkeeper or automated bookkeeping solution, a business owner should schedule a time to understand the business’s financial health.
- Use accounting software. Several accounting software programs are designed to make financial management easier and more effective than an Excel spreadsheet. (yes, people still use Excel only!)
- Don’t be afraid to ask for help. Sadly, it doesn’t take long for things to go awry. If you are behind in managing your monthly financials or are not clear on paying sales tax or payroll tax, seek help from a bookkeeping service, preferably coupled with an automated solution. These automated systems offer reminders and alerts to help you manage.
Why is bookkeeping important for small businesses?
At Expex, we work with small business owners who started their business with a passion, whether jewelry making, vegan restaurants, dentistry, or veterinarians. As their passion grew, so did their business, and simultaneously, their time for bookkeeping diminished. It does not take long to get behind – and it happens more often than you think. As we have discussed, understanding your business and remaining current is essential. Remain vigilant with:
Understanding income statements and balance sheets are a necessary function of running a successful small business. Financial statements refer to your income statement (also referred to as your profit and loss or P&L), balance sheet, and cash flow statement. Financial statements provide you with the ability to understand a critical part of your business’s performance. Sometimes, it is too much for a small business owner to balance growing the business and performing bookkeeping duties. It may be time to hire a bookkeeping service.
What are the benefits of hiring bookkeeping services?
Is outsourced bookkeeping the right fit for your business? Here are five compelling reasons to outsource your bookkeeping.
- Reduces Fraud. It is simple. The number one reason you should outsource your bookkeeping is to avoid the possibility of an internal bookkeeper committing fraud.
- Financial controls. In small businesses, fraud results from a lack or absence of controls, which an employee exploits. A critical process that should be examined as part of a fraud review is how bills are approved and paid. Using an outsourced bookkeeper can ensure proper practices are in place, which can quickly be addressed by implementing basic controls, which are easy to execute.
- Financial management. Ok, we know the truth. No one likes bookkeeping except us. However, without consistent bookkeeping, you will be in the dark when it comes to your business’s financial health. If you stop doing your bookkeeping, you will no longer have a clear picture of your company’s financial health. Think about that for just a moment. How many decisions and business interactions require financial information to proceed?
- Trained and skilled help. Hiring an outsourced or virtual bookkeeping service gives an SMB instant experience from an experienced and qualified bookkeeper. There is minimal ramp-up time, and with an automated solution, there is even a significant reduction in the time you will spend on tasks like approving bills for payment.
- Engaging with an outsourced bookkeeper allows the business owner to start small and expand as the business grows. A start-up company with two employees still needs a bookkeeper. Automated bookkeeping solutions such as Expex provide solutions to help small businesses manage their bookkeeping tasks and focus on growing their business.
Is outsourcing my bookkeeping profitable?
Often referred to as virtual bookkeeping, an outsourced bookkeeper manages your bookkeeping tasks remotely. Your virtual bookkeeper is accessible via software applications, such as Expex. The virtual bookkeeper can automate your bill payment process through electronic means, prepares your monthly financial statements, and ensures your books are tax-ready for your accountant.
Outsourced bookkeeping is traditionally less expensive than in-house bookkeeping and can offer a wide range of expertise based on your type of business.
Don’t let your business suffer.
Running a successful small business is a full-time job with little bandwidth available for bookkeeping. Hiring a professional bookkeeping service and utilizing automated bookkeeping tools to manage your company finances will position your business for success.
About Expex
Expex, based in Schenectady, NY, offers convenient and innovative bookkeeping services to help your small business succeed. Our application, Carly, can do everything a traditional bookkeeper does and more. This financial management program expertly delivers bill payments, bank and credit card reconciliation, and financial records consolidation. Call (518) 389-2305 today to get started, or contact us to learn more about Carly.
