Small business accounting responsibilities include:
Some business owners look for accounting courses through local colleges or local business development offices. There are also many options for online accounting courses. Some offer free information, while others are more comprehensive, paid courses.
Options include AccountingCoach.com, which offers a free bookkeeping program. DWMBeanCounter.com offers free information and a paid eBook version. open.edu has an introduction to bookkeeping and accounting program.
There are many courses like this — all it takes is an internet search and some investigation to find out if a course is the right fit for you. It is important to understand that this information can help you navigate accounting. However, it will not make you a certified accountant unless you’re pursuing that as a career with the appropriate education and training.
The DIY route can be a very tempting approach for small business accounting. When you are starting, it’s hard to think about paying someone money to help you make and save money. For many small companies, DIY is the way they start, but many find that they eventually need help from a pro, whether at tax time or all year long. If you’re thinking about the DIY method, here is some information to help you through.
As noted above, you can use a cash basis method, accrual, or a mixed approach, known as modified cash basis.
There are a few ways to keep accounting books: keeping a hand-recorded log, using a spreadsheet system like Excel or Google Sheets, or using an accounting software platform. Hand-recorded books are far inferior to more modern methods.
Accounting in Excel digitizes physical books. You will want to assign a transaction number to each entry, with column heads for the date, description of the transaction, whether it is income or expense, and the account balance. Fill in the income or expense column with the monetary value, and your account balance will adjust accordingly.
Google Sheets is simply a cloud-based spreadsheet system, so you can use it to account just as you would with Excel. The difference is that you can access your Google Sheets system from any computer or device with an internet connection.
A good small business accounting software platform can bridge the gap between DIY accounting and having professional help. It makes it easier to enter information and automate reports, taking away some of the risk of human error or running out of time for analysis. Some software systems allow small business owners to do other things, like send invoices directly, snap photos of receipts, or track billable time.
While the overall best accounting software for small businesses varies based on opinion, a few big names are well-known for a good reason. Investopedia ranks the best overall software as QuickBooks Online, with the best software for micro-business owners being Xero. Service-based business owners might enjoy FreshBooks, while freelancers see benefits from Quick Books Self-Employed. Explore each option and be sure that the features match your needs. We have additional resources where we have explored Bench vs. QBO and Bench vs. Xero to help you make your decision.
Payroll is a common need for small business owners, but it isn’t always a function built into accounting software. Systems like QuickBooks Online offer payroll integrations to make your life easier and to ensure staff gets paid. If you want to include payroll with your small business accounting software, ensure the integrations exist before you invest.
QuickBooks, in its various forms, is popular because it’s used by accounting professionals and integrates with many third-party applications. Like Google Sheets, it is cloud-based, so you can access it from anywhere at any time. It’s also scalable, so you can add upgrades or boost performance only when you need to, so you can use your profits wisely.
When you need help with accounting and the cost of outsourcing is less than you will gain as a return on your investment, it’s often worthwhile! If you are struggling, feeling stressed, or find that too much time and resources are being spent dealing with accounting to the detriment of other business operations, consider a professional.
To make outsourcing worthwhile, look for a company offering consistent pricing so you can pay a predictable rate. If you are outsourcing, you should also be paying less than what a full-time hire would cost! The actual cost will vary depending on your needs — payroll, a CFO, tax prep, etc. — but if the number seems high, consider getting other quotes.
Getting a quote for small business accounting should be as simple as reaching out to a prospective company and asking for a consultation. Any quote or consultation should come to you at no cost, with no obligation.
*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*