The ultimate guide to small business accounting and bookkeeping Sage Advice United Kingdom

small business accounting and bookkeeping

But modern and digital tools make it a whole lot easier, offering both convenient and highly-capable solutions for the average business. You can do things that big businesses do, but with far less resources. For example, Intuit’s QuickBooks suite helps you auto-track business income and expenses, pay your employees and partners, and file your taxes, streamlining and automating your bookkeeping.

Sales forecasting is all about predicting what’s ahead to prepare for cash-flow peaks and troughs. You can start forecasting cash flow once you have a month’s sales behind you. If you have steady cash coming into the business, you can keep paying your expenses. Knowing how to manage cash in a small business is a key skill for any business owner.

What is the difference between single-entry and double-entry bookkeeping?

Apart from having the data for your transaction on hand, you’ll need to decide which accounts that will be debited and credited. Your general ledger is organized into different accounts in which you record different types of transactions. Bear in mind that, in the world of bookkeeping, an account doesn’t refer to an individual bank account. Instead, an account is a record of all financial transactions of a certain type.

small business accounting and bookkeeping

Many bookkeeping software options automate the tracking process to eliminate errors. If not done at the time of the transaction, the bookkeeper will create and send invoices for funds that need to be collected by the company. The bookkeeper enters relevant data such as date, price, quantity and sales tax (if applicable).

The Financial Statements

When hiring external team members, keep in mind that some of the responsibility still falls to you as the proprietor. Professional bookkeepers and accounting professionals are available to manage, track, and report on accounting and bookkeeping for small business financial activities. For a small business, this can be a great way to get the benefits of having a dedicated bookkeeper and accountant without the need to build out your own accounting and bookkeeping department.