Bookkeeping and Accounting for Small Businesses
Unless you have always had an affinity for numbers or majored in accountancy in college, handling the books and sorting the accounting for your small business is really a necessary evil. For those who are in the process of developing a small business plan or are looking to launch their business in coming months, it is important to get a handle on accounting for small business and what exactly that means for you and your forthcoming business practise.
Accounting versus Bookkeeping
Firstly, it is important to understand some of the differences between bookkeeping principles and accounting for small business basics. In essence, bookkeeping is financial recordkeeping. A professional bookkeeper is typically responsible for recording everyday transactions including: sales, payments, receipts, and invoicing. Bookkeeping responsibilities also include paying bills and staying up-to-date on the day book entries.
While bookkeeping is considered to be an ongoing and indispensable element of business operations, accounting often encompasses a wide range of definitions. With regards to accounting for small business, an accountant is responsible for utilizing the financial records and finance history in order to produce key financial documents, such as taxes, and assess the outlook of your finances and business operations on a larger scale. Therefore, good bookkeeping and good accountancy go hand in hand. Moreover, accountants can offer many other services including designing bookkeeping procedures, developing financial strategies, and financial consulting as a business’ chief financial officer
Should I Consider Hiring a Bookkeeper or Accountant?
Yes. Every small business owner, whether established or just starting out, should consider hiring a bookkeeper or accountant. In many cases, it may not be a matter of engaging a bookkeeper or an accountant but rather a combination of both. Of course, there are many considerations when it comes to accounting for small business, many of which centers around the nature of the business itself. For example, some individual freelancing entities with relatively few overhead costs and who earn income primarily from contract work choose to do their own day-to-day bookkeeping but hire an accountant come tax time. However, businesses that are more complex like restaurants for example, that employ a number of staff, lease space, and have extensive accounts receivable/ accounts payable are hard pressed to achieve accurate bookkeeping without outside help.
A DIY Attitude towards Accounting Can Negatively Impact Your Bottom Line
As business owners, it is in our nature to cut costs wherever and whenever we can. For many of us, that means choosing to do our own bookkeeping and accounting for small business. There are many reasons why individuals starting out in the business world or those of us who have relatively small businesses feel it is unnecessary to pay for accounting and bookkeeping services in Atlanta. Finances aside, many of us feel that we are capable of handling such tasks on our own. After all, we got to where we are as a result of that do-it-yourself attitude right? As it turns out, choosing to outsource your small business’ accounting may be one of the smartest decisions you will make all year. Not only will it help to ensure your business’ financial efficacy is optimal, but it will also enable you to put down the calculator and focus on getting back to growing your business.
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