Just started the business and suffering those panic attacks when you dig into finances and bookkeeping? Having all the WILL to manage them well but unable to find a WAY to do it? You’ve knocked on the right doors. Come in and join other small businesses like yourself! And let’s explore the possibilities to cater to your problem together.
The first and foremost question you need to ask yourself is- whether you have even the slightest of knowledge about bookkeeping if not accounting? Next would be, are you willing to do it all by yourself?
If the answer to both the questions is a big and bold YES, then here is a brief description of activities you need to carry out for proper bookkeeping:
1. Keeping a track of daily transactions
You’ll need to keep a record of all the business transactions in chronological order. You could maintain such records with pen and paper or maintain a spreadsheet for the same.
2. Issue invoices and manage account receivables
It is one of the crucial and very time-consuming tasks. It’s important to issue invoices to the correct person at the correct time and also chase them for payments to ensure that the funds don’t get locked up and that there’s steady cash flow.
3. Paying the supplier and managing account payables
Making timely payments to the people you procure goods and services from, can save you from a lot of penalties and interest otherwise payable for delayed payments. Further, if you make early payments you might even get discounts. So it’s important to manage your account payables properly to ensure maximum savings for the business.
4. Keeping an eye on cash flow
Finance is the lifeblood of any business. It’s important to meet the cash needs of the business on time. There should be enough liquidity to maintain a proper business cycle. No activity should simply be delayed due to a lack of proper liquidity.
5. Preparing books of accounts
Last but not least is to maintain the proper books of accounts. While maintaining books of accounts it should be kept in mind whether the business organisation uses a cash basis or accrual basis of accounting. Moreover, you should ensure that the double-entry bookkeeping method is used to record the data since it’s the most prevalent and acceptable method of bookkeeping.
Here’s a list of bookkeeping and accounting software that could make your task of bookkeeping sort and simple:
Quickbooks bookkeeping is online accounting software with an attractive dashboard. As soon as you log in the app puts important data such as income, expenses, and profits in the display. It is updated regularly. It provides features like automatic sales receipts, split transactions, scheduled invoices, and location and class categories.
Xero accounting software is a cloud-based software for small businesses. The most distinct feature of Xero is that it completely avoids accounting jargon. E.g. The app uses terms like ‘money in’ and ‘money out’ instead of debit and credit. This makes Xero user-friendly. It can be easily accessed from any device since it is cloud-based. Another feature that eases the work of the user is that it automatically imports all the bank transactions from the business bank account. This reduces the time that would otherwise be required in feeding the bank transactions.
It`s simple and user-friendly accounting software. Freshbooks accounting software is most suitable for relatively manageable service-based businesses with no fixed assets. It is well known for its easy-to-use interface and outstanding customer service. Also, it is undoubtedly the best invoicing software.
It is really affordable online accounting software. You can automate routine tasks like billing, payment reminders, payment thank you notes, etc. Zoho accounting software enables you to perform several functions like project time tracking, inventory management, contact management, sales and purchase management, etc. Its distinct features include automatic bank feeds, a collaborative client portal, accounting and taxing, online payments, invoice templates, and analytical reports.
Capium is the most convenient bookkeeping software. It provides advanced search options, enables sorting and downloading of reports, automatic creation of individuals (director) for self-assessment return directly from bookkeeping contact section, creation of accounting period as per user needs. It automatically handles iXBRL tagging of accounts and submission to Companies House. Automation at each stage of the process means accounts can be prepared in Capium with just a few clicks.
It is one of the most commonly used free accounting software. It is easy to work with software that aptly fits into the accounting requirements of small businesses, freelancers, etc. Wave accounting software has its android and iPhone apps. While its free features include invoicing, expense tracking, personal accounting, etc. Its paid features include payroll management etc.
It is a cloud-based ERP(Enterprise Resource Planning) software. The feature that sets it apart from all the other accounting software is that if the company has several business locations scattered all over the globe, then Netsuite proves to be very efficient in dealing with different currencies, taxation, and government regulations.
It is an ERP platform created with keeping in focus the needs of small and growing businesses. It is arranged into 15 functional modules covering almost every aspect of business organisation. The modules include financials, inventory, CRM, sales, production, etc. All the key business areas are integrated into one place, thus enabling quick access to real-time information to make fast and more informed decisions.
Now let’s go back to the beginning of the article and ask the questions again. Whether you have even the slightest of knowledge about bookkeeping if not accountancy? Next would be, are you willing to do it all by yourself?
If the answer to either of the questions is ‘No’- You’ll need to hire a bookkeeper who’ll carry out bookkeeping for you. He/she will ensure all your records are maintained and that they remain up to date.
Bookkeeping is a primary task. It is just a part of accounting. It is followed by the preparation of budgets, fund flow, cash flows, calculating ratios, and ultimately financial statements; so as to analyse the financial health of the business. It’s recommended to get your accounts done by someone who is well versed in accountancy. Choosing the right accountant could be a daunting task. But wait! We’ve got you a shortcut. Click here to know what parameters you should consider before choosing an accountant.