Small Business Bookkeeping; The Secret to Success
Bookkeeping is an essential part of any business, big or small, old or new. Small Business Bookkeeping keeps a business running smoothly. Keeping detailed, keen and clean records of all the transactions and dealings done by a business goes a long way towards making it successful.
A Bookkeeper’s Role
Small Business Bookkeeping is the form of accounting where every bit of data relevant to the financial matters of a company is gathered, organized and filed neatly to be perused by any interested party; such as small business owners, Board of Governors, Major Stock Holders, IRS etc.; at their pleasure.
The financial data relevant to bookkeeping usually comes from;
III) Payroll Records
IV) Bills Statements
V) Bank Statements
VI) Tax Returns
A bookkeeper takes all of this data and analyze the numbers to make projections for profit and loss. The small business bookkeeping service determine the financial health of your business for the present and foreseeable future.
A Bookkeeper’s Necessity
There are many reasons a small business bookkeeping is absolutely necessary. Such as;
I) Bookkeeping can help you prepare for tax season.
II) Bookkeeping ensures you stay aware of and on top of any debts.
III) Bookkeeping makes you understand where your profits and losses are coming from.
IV) Bookkeeping can show you where you are over spending and how to cut costs.
V) Bookkeeping allows creation of detailed financial records, which are helpful in securing investors.
VI) Bookkeeping emboldens and pacifies your existing investors when they see the organized numbers and increased or maintained profits.
VII) Bookkeeping gives you an overall view of the health of a company or a small business. A small business bookkeeping service can help you see which product or service needs to be increased and which to be scrapped.
VIII) Bookkeeping shows you which demographic to target for advertisement and exposure. You can see if people from a certain state, race, religion or gender are more gravitated towards your service or product.
IX) Bookkeeping makes the effort of locating relevant documents, files, records and filing them to the relevant tax jurisdiction infinitely convenient.
X) Bookkeeping keeps your small business prepared for an impromptu audit, either one initiated by a tax agency, or by the internal affairs department.
XI) Bookkeeping allows a small business owner of a start-up venture to gain quick understanding ofthe essentials of his or her business.
Financial Reports Preparation
Financial reporting is a large part of what the bookkeepers actually do according to many small business bookkeeping companies. A financial report has three elements;
1. Balance Sheet. It describes the overall value of your company. It is calculated by analyzing;
I) Value of your assets
II) Value of your debts and liabilities
III) Value of your equity
2. Income Statement. It is a record of all your income. It shows gross income over a given time period.
3. Cash Flow Statement. It shows all cash transactions of your small business. It is detailed record of all your purchases and sales.
Methods of Bookkeeping
I) Manual vs Automatic Bookkeeping
Manual Bookkeeping, as the name suggests, is the traditional way of bookkeeping. You might utilize pen and paper, or an offline program like Microsoft Excel for your needs. This method can be time consuming. It may also leave room for human error.
Automatic Bookkeeping utilizes a software for your data entry and calculations. Most adequate softwares offer a plethora of options and services to the users as part of their calculations.
The best small business bookkeeping services utilize the automatic bookkeeping system to have a faster method of processing and keeping plenty of backups in case data is ever lost.
II) Single-Entry vs Double-Entry
Each transaction in a small business is recorded once in Single-Entry method by a small business bookkeeping company.
Each transaction in a small business is recorded twice in Double-Entry method by a small business bookkeeping company.
Example; if you make a $100 sale, the single-entry method allows you to record it once as a sale. However, the double-entry system allows you to record it firstly as a gain in income ledger and secondly as a reduction in inventory. The best small business bookkeeping services use both methods where they are more appropriate.
III) Cash vs Accrual
In Cash Method, you only record the transaction when the payment has been delivered. In Accrual Method, you record the transaction when the deal is made, an invoice is received or the product is delivered.
Both methods have their own advantages in small business bookkeeping.
The above-mentioned topics and services may have given you a good idea that it is absolutely essential for a small business to consult a bookkeeping service. There are plenty of small business bookkeeping services in Dallas, Texas. But none are more efficient, meticulous and cheap than SG Inc. CPA.
SG Inc. CPA has spent more than a decade in the field of accounting and bookkeeping, constantly making headways into proving its mettle again and again, in increasingly difficult conditions and proving to its satisfied customer base why it is the best small business bookkeeping service in Dallas, Texas.