Small Business Bookkeeping to Boost the Business    by Amitaabh Saboo

in Finance / Accounting    (submitted 2010-02-27)

Small business bookkeeping is a daunting task for business owners. It is not the reason why they started a business in the first place. While it is not the most exciting aspect of starting a business, it is an integral part of any business operation. But if the business' records are properly organized, it ought to be easy and simple.

Importance of Having Orderly Records
Having properly organized financial records for small business bookkeeping may be instrumental in leading the business to success. These are some of the reasons why.
- Financial statements are easily prepared
- A business's financial situation can easily be assessed
- Internal control is attained
- Ease of measuring the business' actual performance against company projections and goals
- Problems or weaknesses, challenges, and opportunities are immediately recognized as they come up
- Closely monitor business operations, including the employee's performance
- Make more informed and reasonable business decisions
- Instant access to pertinent financial information and reports
- Save time, money and effort on overhead costs
- Easily comply with financial and tax rules and regulations
Small business bookkeeping is fundamental bookkeeping. It is recording of the usual transactions, how much you owe from your creditors, and how much is owed to you. Record keeping of equipment and inventory is also maintained. Basically, small business bookkeeping encompasses recording of the accounts payable and accounts receivable; preparation of financial statements, income statement, balance sheet, and cash flow statement and bank reconciliation statement, too.
Importance
It is essential for the following reasons:
- Small business bookkeeping traces the business's money, its inflow and outflow,
- Recording of the day-to-day transactions are essential in the assessment of the business' daily, weekly and monthly accomplishment.
- Performance of the business is shown on the reports. Hence, it is one of the gauges whether or not the business is achieving its objectives, projections and goals. It is the yardstick of how well your business has performed and will tell you where your business is headed to.
Costs
Costs are at a range depending on the business' needs. Some may charge a fixed monthly rate for the basic services. But as the bulk of work increases in volume, as transactions expand, reports are needed more often, the rate also escalates. In other cases, accountants charge an hourly rate initially until they are able to assess the business and amount of time to get the work done wherein they will now post a long-term fixed rate. Other factors that affect the cost of small business bookkeeping are geographic location, size of the business and the skill and experience of the accountant.
For most entrepreneurs, small business bookkeeping is a task that is endured to stay longer in the industry. It is greatly advantageous in making the business become profitable and successful. For businesses that have emerged new in the industry, getting the services of small business bookkeeping is greatly advantageous so that concentration is more focused on boosting the business.