Did you just start your Business?
Are you at that stage where you want to see if you can handle your own Bookkeeping?
See below for some tips on how you can effectively maintain your own Bookkeeping.
By the way, I am not an affiliate to any of these programs. The information I am giving you is free. 🙂
First things first. You should choose an Accounting software to keep track of your Income and Expenses. There are free software programs, as well as Softwares that charge you a monthly fee. Depending on what your needs are will determine ultimately what software you can go with. Do you just need to keep up with Income and Expenses and invoice clients that owe you? You could probably go with Wave Accounting which is free. They offer all of the above, plus more, including recurring invoices. Here is the link:
If you require more, such as employee payroll and inventory, you will need to consider a paid Accounting Softwares such as Quickbooks or Xero. Here are the links:
For example, Quickbooks has different versions of their software to tailor each stage of your Business. You can choose a version of Quickbooks that can even help you manage your travel mileage.
Research needs to be done to determine what is best for your Business.
Once you have your Accounting Software picked, you will need to connect your Business bank account to it which will pull all of your income and expenses. Each month, you will need to categorize your income and expenses appropriately which will later transfer to your federal income tax return.
Bookkeeping also tells you the health of your Business based on the type of reports the Accounting Software produces. If you are doing your Bookkeeping correctly, the reports can tell you great information. It can tell you the financial health of your Business, as well as where the Cash from your Business actually goes.
Bookkeeping goes beyond taxes because it can tell you things that can help you budget and make financial decisions that can benefit you in the future. Even though many Business Owners can categorize Income and Expenses, they are truly unable to read reports and understand what that means for their Business. They truly do not understand what changes need to be made based on these reports and how they can budget and project in the future based on the information they have today.
In my opinion, I think it is great for any Business Owner to handle their own finances and Bookkeeping. But if you have no idea what your Bookkeeping reports are telling you, I challenge you to seek out a Tax Accountant. The money that you will pay in taxes could have paid for your Bookkeeper. As your Business grows, this is truly something you should outsource.
I am passionate about this because I have had clients that have suffered as a result of doing their own Bookkeeping. Not only are you wasting your time from work you could be doing, but you are also wasting money.
You are not saving money choosing to do your own Bookkeeping. “Time is money” is a true quote and anyone that understands this knows how valuable their time is!
If you choose to do your Bookkeeping and/or Taxes, I challenge you to research and learn as much as you can so that you can make the best financial decisions for your Business.
For anyone just starting their Business, try these options out! Start free if you can and move up as your Business grows. In the future, if you ever need assistance or just a second set of eyes, please reach out. I can assist you in setting up your Accounting Software properly and teach you how to use it, as well as offer quarterly check ins to manage your Bookkeeping to make sure it is done correctly.
You will see as your Business grows, that outsourcing these tasks will actually give you the freedom that motivated you to become self employed in the first place! 🙂
