This bookkeeping for beginners guide will help you identify what bookkeeping is, how it should be done and the benefits of outsourcing it.
What is bookkeeping?
Bookkeeping is the word used to describe tracking all of your business incomings and outgoings. It ultimately gives you a record of all financial transactions in your business.
Why do businesses need bookkeeping?
The bookkeeping process has many benefits for your business. Firstly, it allows you to check that you are making more money than you are spending. It also helps to easily give you reliable information about your business which allows you to make informed financial decisions.
Staying on top of your bookkeeping supports you to complete an accurate tax return, with all of your information at your fingertips. Regularly checking your transactions also allows you to identify any fraudulent activity or transactions.
5 top tips: Bookkeeping for beginners
Record your transactions
Firstly, every business-related transaction needs to be recorded. You should also hold on to receipts and invoices that match the transactions. There are many ways to do it and you can find what works best for you. Depending on your business size this can be done by a spreadsheet, downloading information from your bank account or streaming transactions into bookkeeping software.
Reconcile your incomings and outgoings
Reconciling your incomings and outgoings means matching your transactions and balances on a cross-reference check between your books and your business bank account. It’s a very good idea to do this regularly. Making a habit to do this every day or every week helps to keep on top of things and helps you to identify and rectify any mistakes.
Other bookkeeping duties to be aware of
Bookkeeping can also include other tasks such as creating invoices, ensuring invoices are paid and paying employees.
Consider using online bookkeeping software
Using online bookkeeping software like Xero minimises human error and can speed up the process. The software can pull in all of your financial information from your bank account, invoice software and point-of-sale system.
Bookkeeping for beginners top tip – Outsource it!
Finally, if you’re too busy to do the bookkeeping for your business, you can find someone to do it for you. Keep track of all the financial ins and outs with our regular bookkeeping service. When your books are up-to-date, you are in full control of your business with all your profit and cost information in the palm of your hand. Contact us to discuss your bookkeeping needs.