This article will briefly answer questions you may have about the best bookkeeping services for small businesses. It could be that you are planning to start a business or that you already have a small business and you would want to know what bookkeeping service is well suited for a small business; this article will attempt to give you an insight into that.
Options for Small Businesses
With many new and small businesses, it’s very tempting to keep costs and expenses down, so it may be that you are looking to do the books yourself. Perhaps outsourcing to a bookkeeper you don’t feel is cost effective for such a small business, and the majority of people can also do the books themselves. When a business is small, so you may have a number of reasons for doing the books yourselves, but normally the most popular is to cut costs and it’s manageable to do it yourself.
Can You Keep The Accounts Yourself
Sometimes it’s your business, sometimes it’s your spouse’s business. Your spouse starts a business and hands you the books to do so. A question you would ask yourself is: can you manage the books yourself? So can you keep the accounts yourself? The short answer is yes, you can. It’s very straightforward: it can require some study and it does take a bit of time to learn how to keep accounts or to keep books, and it’s likely you have what it takes to keep accounting records for a business. It does help if you are good with numbers, as if you are good with numbers, you may be able to pick out discrepancies quicker than those that are not, and also you can keep you a bit more interested if you’re more of a numbers person like I am.
I am going to advise that if you are going to do the books yourself and especially if it’s your business, it’s quite vital that you understand the accounting terms that are used in bookkeeping and accounting like assets, liabilities, revenue, cost of sales, etc. There are lots of funny terms and if you’re a business owner or are looking to do the accounts yourself it’s important that you know what these terms mean as they’re used a lot by banks. When you have your accountant do your year-end books and he or she provides profit and loss statements and balance sheets, you need to understand what these statements actually mean, what they’re telling you, and if you’re completely new to bookkeeping then it is worth getting to know about double-entry bookkeeping.
Now another question that new businesses may have, or small businesses may have about bookkeeping is: do I need bookkeeping software? If you are a new business or a small business, the answer is likely to be no. There are some special circumstances where new businesses would need bookkeeping software such as a business that really needs a lot of detail from its accounts, or perhaps a business that’s receiving a lot of funding and is actually going to be of a larger size when it starts. But for the majority of small businesses don’t necessarily need bookkeeping software at the start of the business. So that’s the way you can cut costs as your business grows. It is likely that you will need accounting and bookkeeping software. Now, if you’re not going to use bookkeeping software, which is likely the case for the majority of small businesses, then Excel can be more than adequate.
The Service of an Accountant
So the other option is to employ the services of an accountant. Unless you are very good with tax and have some basic knowledge of personal tax, income tax or are willing to spend some time learning about income tax, then it is best that you have an accountant. The difference between a bookkeeper and an accountant is a bookkeeper keeps the records, the day-to-day financial records of the business, whereas an accountant will sort out your tax, your year-end accounts, and your tax accounts.
The best bookkeeping service for small businesses, in my opinion, is to outsource, this way you avoid errors and the stress of going through all of the troubles of doing it yourself.