Category Archives: Accounting

The Monetary Value Of Hiring A Bookkeeping

What are the Bookkeeping rates dependent on?

Regardless of the type of your business and the level of growth, your costs for bookkeepers will depend on the following things. The first of these variables is the idea of exchanges which is finished by the business. This entails the solicitations submitted to clients and the measures of bills got and paid each month.

The second factor is involvement and area. This shows that the clerks will not charge you more than the challenge in the zones. The rates will highly depend on the local rates in the area and the rates in the specific business.

Experience will also make a difference in this regard because long experienced clerks will take advantage of their experience and charge bigger rates. To some business owners, there’s little issues with paying more for specific services. This means that they don’t have a problem paying more to make sure that the tasks being performed are exact.

Here are five tips to make small business bookkeeping easier.

1. Separate business and personal finances.

Co-mingling expenses and income is a common mistake in small business bookkeeping—and one that will cause huge headaches for your business in the future. Open a business bank account as soon as you decide to go through with your startup, and get a separate business credit card. This not only separates your accounts, but also helps your business build its own credit rating.

2. Automate whatever you can.

Entering data into spreadsheets and reconciling numbers manually is so old school. Use cloud-based bookkeeping software, and do your business banking online. That way, you can sync your bookkeeping software with your business bank account so you always have accurate, up-to-the-minute records. Plus, with the cloud, your critical financial data is backed up safely off-site.

3. Ask a pro.

Talk to your accountant to figure out if you can use off-the-shelf accounting software or if you’d benefit from customizing it. Your accountant should be able to not only offer advice but also set up the software for you and show you how to use it.

4. Perform regular financial checkups.

If you put off bookkeeping too long, you end up with bounced checks, overdue invoices or figures that don’t add up. Go over your books weekly to make sure everything is ship-shape.

5. Do a quarterly review.

At the end of each quarter, take an in-depth look at your bookkeeping and accounting records. Look for trends, such as growing or declining sales, year-over-year revenues, or an increase in late-paying customers. Talk to your accountant: He or she can help you look at the big picture so you’re better prepared for future capital needs such as buying new equipment or moving to a bigger location.

Accounting Tips for Small Businesses to Keep the Books Balanced

One reason accounting often gets put on the back burner for small businesses is that it’s tedious and intimidating. 40% of small business owners feel that financial management is the most difficult part of operating a business. When accounting mistakes occur, it can halt the growth of your small business and put you on shaky ground.

In this post, we’re rounding up the best accounting tips to avoid common mistakes that could have a detrimental impact on your business. Once you’re operating with clean books, you’ll reap the benefits that come with it.

1. Pay Close Attention to Receivables

Getting paid is the most exciting part of running a business. Managing your receivables isn’t quite as much fun. When an invoice is issued, you record a receivable, meaning you log that a customer owes you money. By checking this listing you are able to easily see if a customer has an outstanding balance.

When the customer pays you, the amount should be applied to their invoice, and it should be marked as paid. However, when you are trying to keep up with a lot of orders, this is easier said than done.Customer deposits all too often are left to reconcile at a later date since there are never enough hours in the day. That means that when tax time comes around, you are left with a lot of customer deposits in your revenue account and a report of your receivables that don’t match.

2. Keep a Pulse on Your Cash Flow

When it comes to small business accounting tips, education is everything. The more you understand the numbers in front of you, the greater your odds are at managing them well.As you perform weekly and monthly financial reviews, consider producing a cash flow statement. These statements give you a broader understanding of cash movement within (and outside) of your company. A cash flow statement essentially monitors income direction. It also includes the element of time, enabling you to visualize payment cycles and seasonal expenses.

3. Log Expense Receipts

Unfortunately, it is a common mistake for small business owners not to save copies of their expense reports. This can result in a wide range of tax, accounting, and cash flow issues. If you have ever looked at your bank statement and seen a charge for a hundred dollars and had no idea what it was, then you are familiar with the problems that come with poor record keeping.

One way you can solve this problem is by saving a receipt of every purchase that your business makes. It may seem like a lot of work but there are a few accounting tips to make it easier.

4. Record Cash Expenses

When you are an entrepreneur it is crucial that you track all the expenses related to your business. That way these costs can be subtracted from the amount of your total income when it comes time to do taxes.This will give you a more accurate sense of your overall profitability for the year. It is easy to look past expenses paid for in cash. Ask for a receipt from your vendor or log the expense immediately to ensure that it makes it on the books.

5. Know the Difference Between Invoices and Receipts

Mixing up invoices and receipts is an all-too-common way for small business owners to mess up their books. A simple piece of accounting advice to follow is to know the difference between the two.

An invoice is a bill that’s sent to customers after they’ve received your services. Think of invoices as detailed bills that should outline everything the customer has received from your company. An invoice reminds customers that they owe you money. They’re helpful for speeding up cash flow, keeping financial records, and ensuring that you’re getting paid.

Tips to Keep your Business Accounting Organized

There are many upsides to keeping your business accounting organized right from the start. This includes having an easier time doing tax returns, peace of mind that you are paying the right amount to suppliers and transparent visibility on your business finances.

With a systematic approach to business accounting in place, you can make timely decisions on cash flow and see when your business is ready for further development and growth. These five tips can help even the smallest businesses achieve a well-kept set of books and financial clarity in the long run.

1. Keep your personal and business bank accounts separate

Separate accounts will provide clarity over tax-deductible expenses the business incurs. It will also ensure you keep your overdrafts, checking account and credit cards separate from your personal ones, so that no business transactions or VAT charges are omitted.

Keeping your business and personal accounts separate is absolutely necessary to avoid confusing your transactions and being taxed the wrong amount.

2. Avoid paying expenses or bills in cash wherever possible

Other than small amounts of petty cash, it’s best not to use cash for your business transactions. Expenses paid in cash can be difficult to track and reconciling cash outgoings with receipts can be tricky and time-consuming.

Where you do have to use cash, reimburse the payer immediately using an expense form to ensure you accurately record all business transactions, VAT and any other service taxes that need to be captured.

3. Create separate records for accounts payable and receivable

Having an accounts receivable system helps you track whether your customers have paid and how overdue unpaid accounts are, so you can chase up payments and keep your cash flow smooth throughout the month.

It is also important to have a system in place for your accounts payable, which will help you ensure you aren’t duplicating or being late on your supplier payments.

4. Organize your paperwork digitally

Thanks to myriad accounting software out there today, you can say goodbye to manually filing and storing your receipts, invoices and other financial paperwork that’s integral to your business.

Keeping your books digitally also means you can securely backup your files electronically instead of storing them physically on the office premises, which goes a long way in saving space and reducing the risk of losing important business information, as well as making your documents easily retrievable when you need them.

5. Harness the flexibility of the cloud

Once you have a system in place for your digital documents, use cloud-based accounting software such as QuickBooks Online to keep your books up-to-date and stored securely.

What Skills Do I Need to Become a Bookkeeper?

Bookkeeping and accounting often get used interchangeable, however there are a few differences between the two. Both accountants and bookkeepers are essential to the successful operation of a business, and both are great assets to the financial side of things. However some people will refer to an accountant as a ‘giant sifter’, with bookkeepers being the process of pouring stuff into the sifter. You can’t be an accountant without being a great bookkeeper. So what skills do you need to be a great bookkeeper? Here are a few things to keep in mind if you’re thinking about becoming a bookkeeper.

1. Great data entry skills

Having great computer skills is a necessity when working as a bookkeeper. Knowing how to keep up with technology and being able to add in data in an accurate and timely manner is going to benefit you greatly. Touch typing skills are an added bonus that will save you time in the long haul. If you have trouble with new software changes, technology upgrades, or learning these kinds of skills quickly, you may find that you will struggle slightly with this kind of role.

2. Good communication

If working in a large company, you may be required to work alongside accountants and other departments within the company that may require your assistance. Being able to communicate with everyone easily and effectively will make your job (and everyone else’s) a lot easier. Whether it be face-to-face communication or phone and email, being able to communicate effectively is essential to the role.

3. Knowledge of bookkeeping principles

It goes without saying that you should have a great knowledge of bookkeeping, and where necessary, the essential qualifications. Understanding accounting language and having the skills and education to undertake your role is a huge part of the role. You can gain qualifications from courses and schools all across the country and they will all help in your path to gaining a role as a bookkeeper.

4. Organising records

If you’re the type of person that gets sweet relief from organising files and numbers, then you would be perfect as a bookkeeper. Being able to organise and maintain financial records is essential to the role, and it certainly helps if you enjoy working in this kind of position. If you’re more of an “outdoors” person who hates sitting in front of a PC for extended hours looking at numbers and figures, bookkeeping might not be for you.

5. Attention to detail

If you work fast, you need to also be accurate. If you like looking at the details of a project and making sure no leaf is left overturned, this is definitely going to help you in your role as a bookkeeper. Paying attention to detail not only makes for accurate workings and numbers, it also means less issues and hassles in the future for both yourself and your colleagues. Understanding that a simple mistake in one area can cause bigger issues down the track is needed to ensure you perform well in your role.