Small business accounting: How to simplify
Whether you’re a start-up or a mature small business, accounting and everything it entails plays a significant role in the day to day operations. It may not be the most creative or fun part of running a business (for some!) but nevertheless, it definitely isn’t something you can ignore or put little time and effort into.
But what are the essentials to bookkeeping, how can it be made easy and where on earth is the best place to start? These are our fail-safe tips of acing the accounting for your small business and making sure all those boxes are ticked, in the simplest way possible.
What is small business accounting?
In a nutshell, bookkeeping is a process of recording the business’s financial transactions in order to track how much money is coming into and out of your business. As a business owner, not having this insight would make it impossible to grow, or even keep your company afloat. Sounds simple? There’s a lot to it, but it can be.
Setting up a General Ledger
A General Ledger or GL is essentially a way to track all financial transactions – including sales made, refunds or paying bills. Way back when, this was done physically in a journal. But in today’s world, the easiest and completely free way of recording these transactions is through an online spreadsheet (if you opt for Google Sheets as opposed to Microsoft Excel).
Alternatively, if you’d like a more automated approach then choosing to use a bookkeeping software could be the option for you. In a nutshell, this type of software creates a general ledger for you and populates it with your transactions. Yet whilst time effective, there is a price tag – which is a factor you’d need to weigh up.
Streamline your invoices
Is your invoice to-do list a little too chaotic? An invoice management tool could be the trick you need to make sense of it all.
With this type of software, recording and sending invoices as well as payments is automated and super simple. Labelling the different expenses is often an available option too, which really helps organise and offer insight into your payments. Options such as Bill.com are specifically tailored to small and medium sized businesses.
The bottom line is, paying your invoices on time is vital when it comes to maintaining trusting and reliable relationships with your suppliers and/or vendors. It also makes a big difference in terms of your credit. For small businesses, both of these are super important in order to operate smoothly and will make things far easier if and when you start to scale.
Tracking your business expenses
The method you use to track your expenses is the cornerstone of efficiency. Opting for the old school method of physically storing receipts instead of a more automated approach is not only antiquated but ineffective.
By using accounting software, you can track your expenses both big and small in a fast and accurate fashion. Expense management software such as Shoeboxed or Concur are great examples of bookkeeping services for small businesses. The software makes it super easy to track even the smallest of expenses, from travel to home office receipts. There is also free accounting software such as Zoho, if you’re trying to cut costs.
Balancing the books
The trick to balancing the books for small businesses is to do it regularly. There really isn’t a hard and fast rule to how often this should be, as it depends on how busy your business is and how it operates.
For small business owners, this may be a case of finding some time to dedicate at the end of every week or even every day. However, leaving it until the end of every month makes the task far more time consuming and will most likely become something that you dread. So when in doubt, little and often is the key!
Hire a professional
If you’re looking for an even simpler way of bookkeeping, hiring a professional could be the option for you. Whether it be an external chartered accountant, accountancy service or an internal financier, it may not be the most cost effective option but this could save a lot of headaches.
However, whilst on the surface this may seem like an expensive option – the benefit of having a professional handle your accounts is that they’ll have more knowledge around what your business qualifies for in terms of deals, policies and tax breaks. They will also have more time to spend on the job at hand, saving you the headspace for the tasks you’d actually like to be doing!
Signable for small businesses
Signable offers electronic signing for any document. By streamlining workflows, sending to signing takes no time, and you aren’t left chasing paper.
For small businesses, Signable has a Pay-As-You-Go option at $1.50 an envelope, which offers unlimited templates and unlimited users. If later down the line it makes more sense for your business to upgrade your plan, our no commitment PAYG option allows for this. For more information, browse our available plans or get in touch with our customer support team through the chat function on our website.