Your guide to small business bookkeeping
Small business bookkeeping articles
Discover what is bookkeeping and the bookkeeping basics for your small business.
- What is bookkeeping?
- Why is bookkeeping important for a small business?
- What is the difference between accounting and bookkeeping?
- Why is succession planning important for small businesses?
- Bookkeeping for freelancers
- Bookkeeping data entry
- Understand how to manage supplier invoices
- Managing accounts receivable for small businesses
- Setting up a chart of accounts
- How to do payroll: step-by-step process for small businesses
- How to do a tax return
- How to do financial reporting
What is bookkeeping?
Put simply, bookkeeping is the process of recording, analysing and interpreting the financial transactions of a business or individual. Small business bookkeeping is an inescapable element of running your own well managed small business. Some small business owners are more than capable of performing their own small business bookkeeping and forgo the professionals and advisory services. Read the article to find out what is bookkeeping and the bookkeeping basics for your small business.
Why is bookkeeping important for a small business?
As your new business begins to turn over cash for the first time, you’ll begin to consider when to hire a bookkeeper to help manage your ever-increasing accounting admin. To ensure your small business is afforded the best chance of success, it’s time to understand why you need bookkeeping services. Read the article to find out why bookkeeping is important for a small business and why you should consider to hiring a bookkeeper.
What is the difference between accounting and bookkeeping?
Day-to-day bookkeeping is a fundamental and unavoidable aspect of owning your own business. You can always choose to undertake the burden of day-to-day bookkeeping yourself. However, you’re often better served enlisting a dedicated bookkeeper or accountant to perform bookkeeping tasks on your behalf. Read the article as we delve into the importance of bookkeeping and accounting to better understand the respective value they bring to a business.
Why is succession planning important for small businesses?
If you own your own business, especially a family business, have you put any thought into succession planning? Succession planning is as important as a personal will. After all, what actually happens to your business when you retire, want to sell up, or, heaven forbid, pass away?
Planning for these eventualities is a key concern for many business owners, yet it’s an often-overlooked step that’s easily lost in the busy mix of business life. So, if you haven’t put any thought into succession planning, it’s time to pay it some attention.
What you need to know about bookkeeping for freelancers
You’ve started your freelance small business journey but are not sure where to begin with freelance bookkeeping? Don’t worry, with accounting software and a little know-how it’s not such a momentous task. In this article, you will learn the importance of freelance bookkeeping and how freelance bookkeeping works.
The importance of bookkeeping data entry
Whether you do your own bookkeeping or engage a professional, data entry is key to the craft. Learn about modern bookkeeping data entry and how to get it right.
Understand how to manage supplier invoices
When you receive invoices from business suppliers, you need to understand how to manage these in a process known as accounts payable. Learn everything you need to know about managing accounts payable here
Managing accounts receivable for small businesses
As a small business, getting on top of your invoices is vital to driving your success. If you issue invoices to get paid, you need to understand how to manage your accounts receivable. Read our article to learn how to manage your accounts receivable with ease.
Setting up a chart of accounts
Managing an organised chart of accounts is an important part of small business bookkeeping and administration. Learn everything you need to know about COA, here.
How to do payroll: step-by-step process for small businesses
As a first-time employer, running payroll for your new hire takes consideration and effort—but if you split the process into five decisive steps, it feels a lot simpler.
How to do a tax return
Filing your tax return to the ATO as a small business owner might seem like an involved process, especially when you’re tackling it for the first time. But depending on your personal preferences and business structure, there’s a variety of options available for lodging your return.
How to write a financial planning report
Comprising your balance sheets, cashflow and income statements, creating a financial planning report for your small business will help paint a picture of its overall viability at a certain point in time.
Download our free bookkeeping guide
Understand the basics of bookkeeping for small business owners
Frequently asked questions
How will a bookkeeper help your small business?
Here are some ways a bookkeeper will help to keep your business running smoothly:
Keep you compliant
As a small business owner, you’ve got enough to worry about without having to stay up to date with all the legislative compliance changes. That’s exactly how your bookkeeper can help; it’s their job to know about industry updates and compliance changes so you don’t have to. Bookkeepers stay aware of changing laws, so they can ensure your small business is compliant with payroll and tax laws, as well as any other financial rules and regulations that affect your small business.
Help you learn about your business numbers
A great bookkeeper is someone who doesn’t mind sitting down with you and running through the “ins and outs” of all things bookkeeping. They will take the time to explain your business numbers, show you the insights behind them, provide suggestions, tips of the trade and answer your questions without any accounting jargon.
A bookkeeper also keeps track of your company’s financial health and advises you on decisions that can help you grow your business. They can also warn you if you’re about to make a decision that could hinder your longer-term growth.
For more details on why it’s important to hire a bookkeeper, read our article here.
What are the main responsibilities of a bookkeeper?
Bookkeepers oversee a company’s financial data and compliance by maintaining accurate books on accounts payable and receivable, payroll, and daily financial entries and reconciliations. They perform daily accounting tasks such as monthly financial reporting, general ledger entries, and record payments and adjustments. Additionally, many bookkeepers also assist with basic HR duties like new hire documents, compliance, and temporary disability insurance and workers’ compensation filings, making them an indispensable part of an organization’s fiscal fitness.
A bookkeeper’s main responsibilities include:
- Maintains records of financial transactions by establishing accounts; posting transactions; ensure legal requirements compliance.
- Develops system to account for financial transactions by establishing a chart of accounts; defining bookkeeping policies and procedures.
- Maintains subsidiary accounts by verifying, allocating, and posting transactions.
- Balances subsidiary accounts by reconciling entries.
- Maintains general ledger by transferring subsidiary account summaries.
- Balances general ledger by preparing a trial balance; reconciling entries.
- Maintains historical records by filing documents.
- Prepares financial reports by collecting, analyzing, and summarizing account information and trends.
- Complies with federal, state, and local legal requirements by studying requirements; enforcing adherence to requirements; filing reports; advising management on needed actions.
- Contributes to team effort by accomplishing related results as needed.
Do you need a bookkeeper if you have an accountant?
Contrary to popular belief, accountants and bookkeepers perform distinctly different tasks for the businesses they serve. Bookkeepers are responsible for on-going maintenance of their clients’ general ledgers. A bookkeeper’s common responsibilities consist of:
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Compiling data on a daily basis
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Categorizing expenses in the general ledger
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Reviewing the general ledger for accuracy
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Reconciling bank statements against the general ledger
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Generating financial statements
Accountants use the accurate and up-to-date general ledger maintained by the bookkeeper to provide advisory services, such as:
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Analyzing the company’s financial data
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Preparing income tax returns
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Providing tax planning advice
Read our article about the key differences between a bookkeeper and an accountant.
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