Small business accounting can be intimidating if you don’t have a background in bookkeeping. Running a startup is a bit like juggling several things at once. There’s marketing, sales, operations, and so much more. When you add bookkeeping on top of that, it’s no wonder bookkeeping was named the least enjoyable part of running a small business in this survey.
Luckily, it’s not impossible to manage your own startup funds with the help of modern technology, software, and outsourcing tools. You don’t need a degree in accounting to master your money as a small business owner. This guide and free checklist will get you started.
Setting Up Your Bookkeeping
The first step when you begin working on your business is to set up your bookkeeping. You have a few different options for doing this successfully, and what you choose will depend on your own experience and comfort level.
Your first option is to learn how to do your own accounting. If you have financial experience, you might be in a position to do this on your own. With modern tools and software, it might be possible to manage most of your income, spending, and tax information on your own. However, make sure you’re serious about going through every step of this process correctly.
Your next option is to hire an employee to handle your startup bookkeeping. This could be a full-time or part-time employee, depending on your needs. A lot of businesses make the mistake of thinking this is more expensive than it’s worth, but quality bookkeeping is worth the extra funds. Once again, make sure you do your research and only hire a reliable, proven candidate.
Finally, your last option is to outsource your bookkeeping. This is becoming a more popular option thanks to the rise of remote working solutions. Learn more about this and how remote work can help you save costs. You can choose an accounting company or a freelancer, and this will ensure you get professional quality work without the higher cost of hiring your own employee.
Tips for Startup Bookkeeping
It’s easy to make a few mistakes when you’re first getting started with your startup. Unfortunately, bookkeeping mistakes can be quite severe if you aren’t careful. Here are some of the most valuable tips for startup bookkeeping.
Stay Organized – Startups aren’t known for being the most together. It’s easy to get lazy with your finances. Keeping yourself accountable and creating financial organization is key. Without a plan for tracking income and expenses, you’ll find yourself unable to look closer at the state of your business.
Create Analytical Systems – One of the benefits of bookkeeping, beyond just knowing how much to pay for taxes, is taking an analytical look at your money. You’ll need to start by optimizing your income streams. Startups worked with WooCommerce developers from Bright Vessel, for instance, to learn more about their analytics from e-commerce websites. A professional bookkeeper will help you find your best analytical systems.
Don’t Rely on Technology – Accounting software is amazing, and it’s come a long way. There’s no denying that accounting software is powerful, but don’t rely on it too much. You’ll need to work with these systems to make them work for you, and you also could always use a second pair of human eyes from a professional.
Startup Bookkeeping Checklist
Now that you understand how to face your small business bookkeeping, here is a checklist you can use for your daily and weekly accounting tasks. Many of these will be done by a professional you hire, but they’re also a great idea to get into the habit of doing yourself as a business owner.
- Record all transactions
- Document receipts
- Keep invoice copies
- Keep records of unpaid bills
- Create invoice guidelines
- Analyze your inventory
- Process your payroll
- Review your tax payments
- Create and analyze a profit and loss statement
- Create monthly financial reports
These things might not come easy at first, and that’s okay. Learning your best bookkeeping practices will take some time, especially if this is your first time as a business owner. As long as you take the process seriously and do your best to keep accurate track of spending, you’re on the right track.