You got into business to make money, and getting paid is awesome. Keeping track of what’s coming in and what’s going out, however, is tedious, time consuming, and can come with costly mistakes. Bookkeeping is part of business, and straight books and thorough accounting are absolutely necessary to the health of your operation. ??
Follow these steps to simplify your bookkeeping without sacrificing efficiency.
The simpler your system, the easier it will be to use. The easier it is to use, the less likely you are to let it pile up. The less you let it pile up, the less errors you’re likely to make. Your system should only be as complicated as it needs to be.??
Trim the Software Fat
The number one place where you probably have more bookkeeping infrastructure than is necessary is in your software. Software overkill is so common that companies actually advertise features no small business could ever actually use.
More features means better, right? No. Absolutely not. More features means more money and more complications.??
The Best Software??
The best accounting software has all the features you need and nothing more. Free, web-based, no-download software such as Outright performs the basic bookkeeping functions really well at no cost. It keeps track of income and expenses; allows you to link to your accounts, including payment gateways such as PayPal; compiles reports; and does the arithmetic for you.
Accounting software comes in tiers. This is the bottom tier. If you need more features (such as invoicing, inventory management, etc.), build up only as you need.??
If you don’t outsource bookkeeping or payroll, that means you do it in house. If you do it in house, don’t allow too many cooks in the kitchen. Train two trusted, long-term workers how to perform the necessary function. One is not enough because they could get sick or get pregnant or win the lottery, which leaves you back at square one.
Put the task squarely on the shoulders of those employees only. It will increase accountability, put your most sensitive data in fewer hands, and familiarize them with doing it regularly and correctly. If you’re in business, you have to keep good books. Outsourcing comes with its own pitfalls, so if you keep it in house, keep it simple. ??
If You Outsource
There are many reasons businesses decide not to handle bookkeeping in house. It has to be done consistently and correctly, and sometimes the surest route to guaranteeing good results every time is to hire a pro. The good news is, the overwhelming majority of small businesses can hire a bookkeeper part time, with someone updating the books as infrequently as once a week.
Resist the urge to hire an unaffiliated freelancer on the cheap. There are a million independents offering their services on Craigslist, but then you’re relying on the talents and tendencies of a single person. When you hire a part-time bookkeeper through an established firm, you’ll pay extra for their brand, but you’ll rest assured knowing your freelancer has been vetted, that their services will be guaranteed by the larger firm, and that they can quickly be replaced should some issue arise.
Bookkeeping is the least fun and most important part of any business. Sloppy books have been the bane of business owners since people began trading money for goods and services. Get the right software, keep it simple and centralized in house, or outsource if you must. Either way, your books must be your top priority. Otherwise, none of your other efforts matter.
Andrew Lisa is a freelance writer living in Los Angeles. He writes about small business management, accounting, and bookkeeping for companies such as Quickbooks.Intuit.com.