As the saying goes, there’s no rest for the wicked. When it comes to start-ups and small business bookkeeping, entrepreneurial founders must be downright sinful, as balancing the books takes some getting to grips with and is a job that’s never quite over. For those of you who aren’t yet completely comfortable with how bookkeeping differs from accounting, suffice it to say that the former broadly involves a daily system of documenting and categorizing transactions, as well as reconciling bank statements.
Establishing a reliable bookkeeping regime doesn’t need to be cause for despair, however. You’ve got this far in launching your idea into a fully-fledged business, so bookkeeping should be a piece of cake in comparison. Or at least, it can be if you follow the steps set out below on how to make sure your bookkeeping is up to scratch, organized and – more importantly – error free.
Choose a bookkeeping method that best suits your needs.
Organization is the number one trait required of any decent bookkeeper, and this comes in the form of a sensible bookkeeping system. You have several options, ranging from simple do-it-yourself packages to more detailed and involved software that does much of the work for you. Possibilities include:
- Excel spreadsheets
- Cloud-based software, such as Wave or Kashoo
- Outsourcing the work remotely to an online provider, such as Bench Accounting
- Hiring a local certified public accountant firm to do your bookkeeping for you
Decide on an accounting method for tracking income and expenses.
Here your options are simpler and constitute either the cash or accrual method. The former credits and debits expenses and revenues at the time of receipt or payment, whereas the latter does this at the time of the transaction itself. In fact, since businesses must use the accrual method if annual revenues amount to at least USD$5 million, as a small business it’s likely you will be using the cash method.
Organize receipts and keep track of your expenses.
It’s all very well deciding on an accounting method as mentioned above, but however great the method you choose, it will be futile if you don’t effectively keep track of expenses via your chosen method! Doing this is vital if you intend to claim deductions for things like travel and overheads, which you should be doing in order to qualify for some of the unique tax breaks available to small businesses.
Many start-ups sensibly seek help when it comes to their bookkeeping needs, to get themselves on track and compliant from day one. If this appeals to you, Larry L. Bertsch, CPA & Associates works with many small business owners in Las Vegas and offers a complete spectrum of small business bookkeeping services. Call (702) 471-7223 today, and we’d be happy to talk you through your number crunching options!
