One of the most integral parts of owning a business is maintaining financial accuracy. Without a correct pulse of your companies cash flow, your business may be running on borrowed time.
Small business bookkeeping is all part of the job description and one that must be taken into careful consideration when deciding on what approach to use. Doing it yourself is an option but let’s face it unless you have a love of math or bookkeeping it’s a tedious process that is often avoided.
Let’s take a look at the benefits of DIY bookkeeping for small businesses.
Small Business Bookkeeping
The first thing any business owner should know is what a bookkeeper does on a day to day basis. A bookkeeper is wholly responsible for recording and balancing the financial transactions of any given organization.
When there are discrepancies in the numbers, it’s up to the bookkeeper to figure out the underlying cause. If it’s a simple mathematical error, then the problem is simple to correct; however, in most cases, the issue is not quite that easy.
If there is a problem with your company, you may first see it in the numbers. Many small business owners think that the bookkeeping process is recording numbers however this is a gross overgeneralization of the role.
The person that you have handling the finances should be someone who has excellent attention to detail but also a keen eye on trends, lean processes, and payroll. Let’s take a look at some of the decision that needs to be made when setting up this position.
Questions to Ask When Setting Up Small Business Bookkeeping Department
The first question you should ask yourself is how much time and experience you have to invest in such a crucial role. Again, you’re dealing with the financial aspect of the company, so this role is not to be taken lightly.
In-house or Outsource
This decision will be the basis for all other questions in this section. Outsourcing to an established company who has experience in bookkeeping help for small business. It may come at a cost but in all actuality may save you time and money in the long run.
Should you decide to keep this department in-house here are some of the questions that you need to ask yourself.
- What type of accounting method will you be using: cash or accrual
- Single or Double Entry Bookkeeping
- Are you familiar with income statement basics: Costs, Expenses, Revenue
- Do you know how to calculate business assets?
If you cannot answer even one of these questions then outsourcing your bookkeeping is probably the best bet.
Knowing Your Numbers Helps You Grow
There is so much that goes into running a small business that the day to day tasks can distract you from directing your operations. Having a great team on hand that is trained and experienced is key to successful growth.
Knowing what’s right for your business can be tough so never be afraid to call a professional bookkeeper for advice. They can help you get your small business bookkeeping established and grow your business.