Small Business Bookkeeping Basics

When equipped with the right accounting software, you can do more than just basic bookkeeping. You can effectively analyze the financial health of your business, find ways to generate more profit, and move forward with your business plan. The right small business accounting software can take the stress out of balancing your business’s books, separating your business and personal expenses, and prepping your business for tax season. You can connect nearly 10,000 different bank and credit card accounts with Wave, so your financial transactions import automatically to make your bookkeeping simple.

You likely won’t have the same exact accounts as the business next door—that’s one key reason we recommend meeting with a CPA to set up an individualized chart of accounts specific to your business. But regardless of the type or size of business you own, the accounts we list below are the most popular. Alternatively, you can pay an accountant, bookkeeper, or outsourced accounting company to manage your accounts and ledger for you. Once the entries are assigned to the correct accounts, you can post them to the general ledger to get a bird’s-eye view of your current cash status. Most accounting software does this for you, so you don’t need to worry about an extra step.

What Do Small Business Accounting Services Do?

Not only do the majority of small business accounting professionals use QuickBooks Online, but there are also endless online training resources and forums to get support when needed. All accounting features can be conveniently accessed on one main dashboard, making bookkeeping more fluid and efficient. We offer flexible plans and pricing to meet your needs and budget. Whether you just want help tracking receipts or you’re looking to automate complex workflows and support a large team, we have options for you.

• You want to be at your best when you’re looking at figures that explain your business’s profitability and help you chart a course for progress.
• So, depending on your accounting needs, Wave’s software offerings could provide you with a great free or low-cost solution.
• It’s also worth noting that the free plan doesn’t enforce limits on income and expense tracking, bank and credit card connections, collaborators or accountants.
• You’ll save time chasing receipts, protect yourself from costly errors, and gain valuable insights into your business’s potential.
• Getting a unique phone number for your business is incredibly easy and often free.

Accounting services pay special attention to your company’s expenses—not bills that you enter and pay (though some support this), but rather other purchases you make. This is an area of your finances that can easily get out of control if it’s not monitored. So, small business accounting software separates them into expense types. Then the software compares them to your income using totals and colorful charts.

Wave — Simple, Free Accounting Tool for Small Businesses

MarginEdge is the best accounting software for restaurants because it offers a suite of features designed specifically for food service businesses. It integrates with popular point-of-sale (POS) systems, so you can automatically import sales data and track your margins in real time. The software also generates detailed reports on food usage, which can help you Accounting and bookkeeping for small business reduce waste and improve your profitability. With up to 50 billable clients, pay $30 per month for its Plus plan. Single-entry accounting records all of your transactions once, either as an expense or as income. This method is straightforward and suitable for smaller businesses that don’t have significant inventory or equipment involved in their finances.

TurboTax offers tax support for sole proprietors, partnerships, LLCs, S corporations, and C corporations. If you need tax assistance, TurboTax can connect you with a live accountant for guidance. You can forget about chasing clients, too, and use automated payment reminders instead. There’s also an option to add a “Pay Now” button to email invoices, so customers can pay you instantly from their devices.

Best Small Business Accounting Software in 2023

As your business grows and you hire employees, you can consider whether to rent office space or keep working remotely. Once you’ve settled on a business name, you’ll need to register your business in the state in which you will do business. For a bookkeeping business, you may also want to include information regarding your niche and any certifications that you have as well.

Our favorite pick for multibusiness management is Sage Intacct, with its robust reporting and easy visibility across business profiles. Any connections between you, your bank accounts, and Wave are protected by 256-bit SSL encryption. After creating your account, everything is set up so you can get started. Your data is always available, and backed up for extra peace of mind.

This will make your business appear more professional and maintain your privacy. Getting a unique phone number for your business is incredibly easy and often free. You can get a free Google Voice number that includes a local area code, voicemail, texts, and unlimited calling. You can explore other options in our guide to the top-recommended business phone systems. Most people operating a part-time bookkeeping business with no employees will operate as a sole proprietorship, which works fine.

Who should manage small-business bookkeeping tasks?

Customers schedule an appointment to have a bookkeeper review their transactions, and  multiple schedules are available to choose from. You will have access to a client management portal, and can communicate with customers through video conferencing and messaging. For $55 per month, get the Essentials plan and have up to three users, manage and pay bills and track time. With its Plus plan, it includes up to five users, and you can track inventory and project profitability for $85 per month. There are other reports, though, that aren’t so easy to understand.

Wave is our favorite free accounting software option for small-business owners. Unlike most paid software, Wave has unlimited user access, including easy access for accountants and bookkeepers. And along with foundational reports like income and cash flow statements, Wave  includes sales tax tracking reports. Most notably, its comparative documents help you understand your business’s finances to make wise financial decisions.

Good bookkeeping is foundational to running a profitable business. After all, if you don’t know how much you’re making or where that money is going, you’ll have a hard time finding ways to expand your profitability. When manually doing the bookkeeping, debits are found on the left side of the ledger, and credits are found on the right side. Debits and credits should always equal each other so that the books are in balance. Whether you do the bookkeeping yourself or hire someone to do it, certain elements are fundamental to properly maintaining the books. Some of these elements are done more regularly than others to ensure that the books are always up to date.

Wave’s optional paid features include online payment processing, payroll software, and access to personalized bookkeeping services and coaching through Wave Advisors. If you’re interested in using payroll software, you can start a free 30-day trial when you sign up for Wave. To determine the best accounting software for small businesses, we reviewed the rates for each and compared the price to its feature set to determine each provider’s value for the price.

For VIP Service, it’s an additional $50 per year and comes with one-to-one training, a dedicated support team and early access to new features. For an additional $150 per year, Automated Insights come with the ability to import your bank transactions, get accounting reports, access real-time insights, receipt pairing and custom invoices. Neat is popular with self-employed entrepreneurs because it’s so easy to use. Filter transactions, match receipts with expenses on the go, customize invoices, make payments and view trends and insights about your business. Plus, get automatic accounting reports, receive guided workflows and set it up in five minutes. If you have five or fewer clients, you can sign up for FreshBooks’ Lite plan for $17 per month.

Freelance jobs can range from quick temporary projects to long-term employment. However, they may be less likely to offer training or educational opportunities. Bookkeeping is a great place to start if you’re hoping for a way to break into the finance industry.

Founded in 2003 in Toronto, FreshBooks started as just an invoicing software. Over time, more features have been added, and as of 2023, FreshBooks has over 30 million users. When an invoice is past due, follow these five steps to collect outstanding payments so you can get paid sooner.

• Most companies use computer software to keep track of their accounting journal with their bookkeeping entries.
• Additionally, FreshBooks often offers discounts for your first months of membership.
• You’ll also need to choose a bookkeeping software for your bookkeeping business.
• There are no trials or hidden fees, and it includes all the key features you need to keep your books accurate and run your business smoothly.

After completing your business plan, you’ll have a good idea of what your estimated startup costs will be. In general, the startup costs for a bookkeeping business can be low if you work out of a home office as opposed to leasing office space, which we’ll discuss in the next section. The experts say that you should always have at least six months’ worth of expenses in the bank.

Without a pro taking a look at your work, there’s a big chance your mistake will go unnoticed. In our fast-moving digital age, small businesses can greatly benefit from deploying a powerful accounting software solution to address their needs. As stated previously, determine your must-have features for your small business. Examples of features are expense and time tracking, invoices, payroll services, multi-currency support, and reliable integrations.

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