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Accounting and bookkeeping for small businesses
What is accounting and bookkeeping?
As per definition, accounting or accountancy is the measurement, communication and processing of financial information. Accounting is a language of business. The results of a company’s economic activities are measured by accounting and conveyed to investors, shareholders, customers and all parties involved with the company. Book keeping is the is the recording of financial transactions in financial reports. Accountancy services for small businesses are as important as that of big companies and should be taken very seriously. How then can small businesses keep their accounting records? Remember, there is a difference between a bookkeeper and an accountant.
The main options for bookkeeping are:
Most stationeries out there sell bookkeeping books and the owner of a small business should purchase one. They are very cheap and affordable. They will use this book to keep your records on pen and paper. The limitation to this is that you only have one copy of the information and should it get lost you have a major setback.
This is the simplest computer program from Microsoft Office that a small business can use to keep records. Excel offers spreadsheets which can be edited and used to keep financial information. Excel can be used to do basic arithmetic calculations as well as complex ones depending on the level of study of the user.
These include programs such as quick books which you can buy and implement for your small business accounts. The most common software package is Sage which will deal with all of your book keeping needs. The set back is that it takes a bit of learning before you are able to use it at a professional level.
When it comes to accountancy services for small businesses, some business men prefer to hire an accountant to deal with the businesses financial records. In as far as choosing the right accountant, working with him of her and choosing the right software the following points are of importance;
Make sure you check out their qualifications:
Find out the firms in your country that have been ranked as number one in terms of finance and accounting matters. Reviews are available online or you can get advice from fellow businessmen. It will be costly to hire accountants from such firms but your financial records will be in the best hands. As a businessman always remember cheap is expensive.
Accountant can advise you on estimations:
When it comes to whether or not you have enough funds to meet your tax liabilities, most businesses estimate a percentage of profit that would typically be payable based on the previous business year results. The accountant will be able to advise you on such matters.
Maintain a good relationship with your accountant even after appointment
The accountant will issue you with a letter stating their terms and conditions, which you should carefully read before endorsing it. Even after appointment, they should always keep in touch not only at the end of the financial year. You should also reciprocate by telling them of any changes in your business no matter how small and problems or challenges that you are facing. Remember to always review the charges your accountant is charging you from time to time. This way you are able to tell if your accountants services still match your business needs.
Choose an accountant you get along with.
Personality, is key. Since you will be divulging quite sensitive information about your business to the accountant it is good to hire a person whom you get along with. Often many people complain about their accountants.
Picking the right software:
Picking the right software is like buying a new car. some people like Ford, other Toyota and so on. They all do the same job but it is the feel that makes a difference. The same applies to choosing a software that will help in accountancy services for small business. Sage is the most popular as it is very simple but QuickBooks is very professional. Remember, most software’s have a free trial. Try before you buy.
Accountancy for small businesses is necessary as we have seen. Look at the individual tasks which need to be done, do they need to be done by you or an outsider? If you opt for the outsider, take your time and vet all the options available..