Excited about your new business? But you may not have anticipated the hours you spend maintaining your financial records. Bookkeeping Solutions are a crucial part of any business. According to the U.S. Bureau of Labor Statistics (BLS), approx. 20% of small businesses fall in the first two years, 45% in the first five years, and 65% in the first ten years.
One of the main reasons for this failure is poor financial management. To prevent any undesirable outcomes, you must realize that bookkeeping is as important as any other business operation. We will take you through the various options available to you, including doing your own bookkeeping, hiring a full-time accountant/bookkeeper, virtual bookkeeping solutions, and remote bookkeeping firms.
Types of Bookkeeping Solutions
If you just started out or you have a small business with very few financial transactions, you may choose to do your own bookkeeping. Here are two bookkeeping solutions that you may use to record your transactions. You can opt to do it the traditional way (books and papers) or using bookkeeping software.
Single-Entry System
Small businesses that have no or few employees and follow the cash basis accounting may go for single entry bookkeeping. It is the simplest form of bookkeeping that records the date, description, transaction value, income/expense, and balance. You will find single entry bookkeeping easy to implement but only as long as your business doesn’t have complicated transactions.
Double-Entry System
Businesses that follow the accrual accounting system will find double-entry bookkeeping to be the most appropriate to record complex transactions. It is an accounting method that records a financial transaction in at least two accounts. For example, if you take a loan of $30000, your asset account and your liabilities must be increased by $30000. This method of bookkeeping follows the basic accounting equation: Assets = Liabilities + Equity.
Hiring an Accountant /Bookkeeper Full-Time
The intricacies of bookkeeping often push small business owners into hiring a bookkeeper or an accountant to work for them full-time. But this move may attract a lot of unnecessary extra expenses, for example, office equipment, insurance, overtime pay, etc. Small enterprises (10 – 49 employees) and medium-sized enterprises (50 – 249 employees) could benefit a lot from having an in-house accountant to carry out tasks including monitoring cash flows, assessing financial health, and providing strategic financial advice.
Bookkeeping Firms
In-house bookkeepers and freelance bookkeepers don’t make you immune to surprises. Imagine a situation where an investor is interested in your company, but you are unable to present the financial documents that prove the splendid financial health of your company because your bookkeeper is sick. Bookkeeping firms will have several bookkeepers to assist you whenever you need them. Since firms spend significantly more money to run the business, they usually charge higher than a personal accountant or a bookkeeper.
Virtual Bookkeeping Solutions
Virtual bookkeepers do exactly the same tasks that an on-site bookkeeper does. The only difference is, they do it remotely. But this won’t adversely affect their productivity or the quality of service they provide in any way. Remote bookkeepers usually make use of an online bookkeeping software like QuickBooks Online to record transactions, reconcile accounts, and process payroll.
There are other benefits to hiring a remote bookkeeper, especially one who does QuickBooks bookkeeping solutions. All financial documents will be protected and organized, and you can access them anytime you want to study your company’s performance. In case of a natural disaster, all important financial records will be safe as everything is scanned and uploaded to the cloud-based bookkeeping software.
If numbers give you a headache, there is no need to be ashamed of it. Not everyone is an expert in everything related to business. Hire a remote bookkeeper today and focus your energy and spend your valuable time on growing your business. Let the bookkeeper worry about invoices and tax season.
Virtual bookkeeping has become a popular choice for many small businesses since the pandemic started. Stilz Bookkeeping led by Hiren Shah, a certified member of the QuickBooks ProAdvisor® Program, has more than 20 years of proven bookkeeping experience. Head over to our pricing section to find out the packages we offer.