If the thought of bookkeeping leaves you feeling overwhelmed, remember that mastering this skill is an essential first step in creating vital financial reports for your business.
Chances are that you have gone into business for yourself because you are extremely passionate about the ‘thing’ that you do best, and that pesky part of business life – bookkeeping – wasn’t the motivating factor!
You would certainly not be the first person in the history of commerce to feel this way. Yet you have a distinct advantage above your forefathers – we’re now online and some very smart companies have made bookkeeping a breeze, possibly even enjoyable task. Here are a few considerations as you embrace this new part of business life:
Understanding the basics
Sometimes just being comfortable with definitions can help you feel more at ease. So let’s look at this briefly. Bookkeeping is what will help keep track of all your financial transactions and will identify which account each transaction should be recorded against. Accounting is the structure that helps you organise those transactions and enables you to report information about your business through two vital financial reports: a balance sheet and an income statement.
Software accounting package
In today’s age with online accounting as affordable and effective as never before, there is no excuse to be bogged down with manual systems. Online accounting packages such as Intuit QuickBooks are incredibly simple to use, come with support staff and better still, will be able to give you a regular dashboard snapshot of your business which provides the ultimate peace of mind. It allows for electronic recording, storing and retrieval of your transactions, as well as generating sales invoice and statements for customers which look professional and make managing your cash flow much more effective than manual processes. QuickBooks offers you a free trial, so if you haven’t already signed up, get going so it’s possible to start streamlining your business life.
Building discipline around key areas
Staying organised and adopting a methodical approach is half the battle, so ensure you keep things ticking along with these organisational tips:
- Keep your receipts and invoices for all business expenses
- Build a weekly or monthly practice of inputting data into your software program and make it regular, so it becomes habit and you don’t end up overwhelmed
- Build a monthly practice of issuing invoices and statements to your clients. It looks more professional if your clients are receiving invoices in an ordered and timely fashion
- Set up a business bank account and, where possible, avoid mixing your business and personal finances, as this will make it easier to track your expenses and income
- As much as possible, pay your expenses during a credit card or bank transfer so you have a permanent record of the transactions on your bank statements
Learning the ropes
Want to learn more about basic bookkeeping and accounting? There are plenty of online resources available that will help you feeling more empowered and engaged, such as www.smallbusiness.co.uk and www.startups.co.uk. Another great avenue is the ‘Dummies’ series of books, which are an excellent resource to give you the basics of bookkeeping and accounting.
So don’t hesitate – by embracing bookkeeping you’ll be soaring through your accounts in no time. Take the smart approach and put online accounting into your life by signing up for a free trial with QuickBooks. For more articles on startup life, have a look at QuickBooks Small Business Centre.