Small Business Bookkeeping – Importance of Bookkeeping in Business

Bookkeeping is something that no business can live without. Bookkeeping for small business is an essential part of any business operations, it helps keeping track of all the financial transactions of the business.

There are two main reasons why the books should be kept:

Management and growth of business

Bookkeeping helps in managing and growing a business by ensures that:

  • Financial performance and financial position of the business is readily available at anytime;
  • Comparison can be made between the forecasted and actual figures to learn the financial health of the business;
  • Analyze the expenses to determine how to operate the business more cost-effectively;

Tax requirements

  • Books of accounts are readily available for external purposes (i.e. for bankers, investors and Tax authorities).
  • To complete the tax return or make claims.

You can Learn Bookkeeping Basics. here.

Basic Bookkeeping for small business

There are several ways to keep financial records in a small business:

  • Keep books manually, preferably using Excel spread sheet (small business bookkeeping spreadsheets).This is easy and cheap option, time consuming though!
  • Get an accounting software packages. Bookkeeping software for small business such as Sage, Peachtree, Quickbooks, Tally are widely used. Computerized bookkeeping removes many of the paper “books” that are used to record transactions and usually enforces double entry bookkeeping.
  • You can use online bookkeeping software or Online bookkeeping or remote bookkeeping services. It allows source documents and data to reside in web-based applications which allow remote access for bookkeepers and accountants. All entries made into the online software are recorded and stored in a remote location. The online software can be accessed from any location in the world and permit the bookkeeper or data entry person to work from any location with a suitable data communications link.

Therefore, as you can see above how Small business bookkeeping is critical to the success of the business. Further it can be made very easy and manageable by using the options mentioned above.

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