Small Business Bookkeeping

Small business bookkeeping can be an enjoyable and rewarding career choice.

If you are looking to undertake bookkeeping for small businesses, this article will help you achieve success at interviews. It will also help you advise your potential clients on what they can do to maintain the correct records and help keep their costs down.  This will make your life easier and enable you to provide a more cost-effective service to your clients. It will also increase the trust between you as your clients will see that you are not out to make as much money as possible from them!

Ask yourself for a moment, “Why is this business looking to use my services?”  Is it because they want their bookkeeping done or is it because they want to either save money or make more money? 

The purpose of having a set of accounts is to help run the business and make profits. This datum should be expanded upon when you are being vetted by a potential client. If you can help them see that you will produce accurate figures in timely manner that will help them to control their business more effectively and thereby increase their profits, they will stop viewing you as simply a cost to their business but as an asset which they cannot run their business without!

Small business bookkeeping requires adherence to most of the same rules as for medium or larger companies. The rules are mainly the same until it comes to filing and so on.

You should advise your clients that the basic records that they need to keep are:

  • Documents related to all sales and income.
  • Documents relating to all items of expenditure.
  • Details and documents (receipts etc) of all petty cash expenditure
  • Details of any monies, goods or assets taken out of the business for personal use
  • Details of any funds paid in from the owner’s personal accounts
  • All source documents relating to payroll and taxes
  • All bank statements, paying-in slips, cheque book stubs etc

Explain that an essential part of running any small business is to keep all documents relating to income and expenses. Doing this will enable them to keep track of their finances and will help you, the bookkeeper, to do your job more efficiently and cost effectively. 

In addition to this, if they have an audit or a visit from the revenue, they will required to produce the source documents to back up their figures or face potential fines from the Revenue. These fines could be potentially crippling to a small business, hence the importance of keeping documents.

Some thought will also need to be given as to where all of these documents will be stored. Depending which country you are in, documents have to be kept for a number of years for different revenue departments.  I would advise you to have the client keep their current and previous year’s documents on site if possible and keep the rest archived. The archiving can be off site if the business premises do not have sufficient space.

In this digital age, thought should also be given to security and back up of the financial records kept on computer systems. Loss of the information held on the companies computers could be disastrous, or at least hugely time-consuming to put right. Therefore, backups should be carried out daily. Also, on either a daily or weekly basis, a backup file should be taken and stored off site, in case of fire or other damage.

Small business bookkeeping should be quite straightforward if you can get all of the above put into practice.

And I wish you every success.

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