How to Keep Books for a Small Business: 13 Tips to Follow

Starting a bookkeeping business is something you might be interested in if you naturally love numbers and want to break free of the traditional nine-to-five. It’s possible to offer bookkeeping services to clients in person or remotely, which may be ideal if you would prefer a work-at-home job. When you start to do bookkeeping for your small business, you should be aware of the different types of accounts that you need to maintain. Instead, all of the money put into the business is tracked in capital accounts and money taken out appears in drawing accounts. What’s important here is that your books should carefully record all of the owners’ equity accounts. It can be anything from buying equipment like computers, vehicle to help you get from A to B when on the job or even furniture and other items for your business.

The tips below are industry standards that will help any small business excel at bookkeeping. The Chartered Professional Accountant firm directories on the American Institute of CPAs website is another great place to find a bookkeeper. Take the time to organize your records, whether that means buying a filing cabinet or breaking out the label maker. Saving your records in the cloud also ensures that they’re easily accessible in a digital format from any device. Making sure your records are well-organized can save you a big headache if you’re ever subjected to an audit.

What are some of the challenges of small business bookkeeping?

Once your bank accounts have been reconciled and any adjustments made in your recording tool of choice, you’ll want to close the month and print financial statements. While the job of bookkeeper may appear similar (or the same) as an accountant, they are only similar on the surface. A bookkeeper records all of the financial transactions for a business, while an accountant’s job is to interpret and analyze the data recorded by the bookkeeper.

Do you have more questions about the bookkeeping process for small businesses? Wondering how best to collect and track financial information, deal with expense management, and ensure healthy cash flow for your business? Here are some of the most frequently asked questions on bookkeeping for small businesses. Never leave the practice of bookkeeping (or your business assets) to chance. No matter what system you implement, incorporate a practice of reconciliations, by comparing the numbers in your system to the source records, like bank statements, receipts, and invoices.

Price your services

Start by implementing these 13 bookkeeping and accounting fundamentals. After some of your finished items have sold, you can track the cost of goods sold by including all direct costs. This can be done using the traditional method or with activity-based costing. You can figure small business bookkeeping out both your direct and indirect costs by performing a cost assignment to each type of good you produce or service you provide. Reconciling provides you with an accurate cash balance, which can be particularly important to smaller businesses with limited cash flow.