Bookkeeping for Beginners | A Beginner’s Guide to Bookkeeping
Chances are you didn’t open your business because you love the books and bookkeeping side of things (unless you’re us, of course!). It’s probably much more along the lines of: you opened your business because you have a passion for something amazing, and you’re out to make a great product or provide a valuable service. While we know you’re doing awesome things in the world, it’s important not to lose sight of your bookkeeping and accounting. After all, these tasks are what really drive your business. In this beginner’s guide to bookkeeping, we’ll cover the basics of your books and help make sure all new business owners are on the right track.
A Beginner’s Guide to Bookkeeping
What’s the difference between bookkeeping and accounting?
We hear this question a lot. While both are important to the overall financial health of the company, they serve different purposes. In short, bookkeeping is all the activities you do to track the finances of a business, which may include things like your invoices, receipts, and tracking expenses. This tracking can be done in programs like Excel or QuickBooks. Accounting, on the other hand, is what you do with this information. This might include tax planning, revenue forecasting, and so on.
Why should I stay on top of my books?
As a new business owner, especially one who did not get into the business for the love of accounting, the books may naturally fall to the wayside. But we’re here to tell you – it’s important to stay on top of your books, because it will help you manage your cash flow, be ready for tax season, and other important things like being more likely to qualify for a business loan or attract new investors.
What are the best bookkeeping apps?
We recently covered this topic in another blog, but in short – there are so many great accounting apps and online tools to help you manage your accounting and save time doing so. If you’re planning to manage your accounts all by yourself, we strongly recommend you find a program that works best for your business, instead of trying to do it by hand or by memory.
Protect Your Business from Embezzlement
One of the biggest threats new businesses face is embezzlement from employees or partners. Make sure your bookkeeping practices account for separation of cash duties to make sure you're protecting your business from this detrimental act. Take it a step further by knowing and watching for the warning signs of embezzlement. While you might not think it will happen to you, the reality is, many businesses have had this happen to them. It’s better to be safe than sorry.
Create a System
No matter if you decide to get professional accounting help or utilize an online application or tool to help you manage your books – create a system and stick with it. You must keep your books organized, manage your receipts, expenses, write-offs, and so on. Find a method that works for you to keep track of your accounts to ensure you know the financial health of your business and can make informed decisions based on the viability of your bank account.
When to get bookkeeping help?
At some point, many small business owners find they do not have the time or skills to manage their books. If you’re finding yourself in this position, it may be time to think about asking for help. Use this guide to help you decide.
If you’re in need of bookkeeping and accounting help for your new small business, look no further than Tally Services in Fort Collins, Colorado. We partner with businesses and organizations of all sizes to provide bookkeeping and accounting services to help your business grow and succeed. Learn more about our services and don’t hesitate to contact us if you need help.