Any business, whether it’s operated out of your mother’s garage or featured on the Forbes 100 list, should keep records of all transactions and financial activities.
This vital process, referred to as bookkeeping, can be tedious, but it’s essential to running a successful company. If you’re not sure why bookkeeping is important or how to begin the bookkeeping process for your small business, read on for our easy bookkeeping 101.
Bookkeeping requires a lot of work and fine attention to detail, but in the event you need to look back on your records, you’ll be forever grateful you set-up a bookkeeping system. Bookkeeping allows you to track all invoices, check on the state of your cash flow, extract data about your business’s financial growth, and file your taxes more easily at the close of the year. Plus, if your company is ever audited, they’ll need to examine your bookkeeping records. Having your books in order will save you a world of trouble!
While it’s possible to bookkeep by hand or create your own setup on spread sheets, the best way to begin bookkeeping for a small business is to sign up for or download a program to help you through the process. As your company grows, it’ll be simple to continue bookkeeping with the help of that software or online program, as the math will be done for you and you’ll be able to search through records at the click of a button.
Bookkeeping Software
One way to set up a bookkeeping system is to purchase special software for your computer. With the help of a program like QuickBooks or MYOB, you can securely update your accounts, prepare statements and create invoices.
Online Bookkeeping:
Another way to create a bookkeeping system is to sign up for a cloud-based program, such as https://www.xero.com/au/Xero or Wave. With an online account, you can access your records from any device, whenever you need to check your numbers. As with any cloud-based program, there are added security risks, but the online programs tend to be much more affordable than software.
For more business accounting tips, make sure to check out our small business finance hacks and guide to cash flow! If you need a financial boost, don’t hesitate to reach out to our team – we’ve specialised in providing small business loans to Australians with big dreams for many years and would love to support your vision.