Can I Just Do My Own Bookkeeping?
The question of whether you can do your own bookkeeping as a small business owner depends on two things: 1) whether you have the bandwidth to learn bookkeeping basics and accounting software, and 2) whether you have the time to do monthly bookkeeping. If you answered ‘yes’ to both of these, then it’s possible that you can do your own bookkeeping. However, it’s important to consider that this will take time, and that will have to be a sacrifice you are willing to make. Let’s take a deeper look into what bookkeeping basics are, what kind of accounting software there is, and what monthly bookkeeping looks like; so you know what to prepare for if you choose to go this route.
Bookkeeping basics are the fundamentals of the accounting field; they make up the foundation for financial reporting, future forecasting, and tax compliance. Some bookkeeping basic topics you will have to learn include: the accounting equation, debits and credits, accounting methods, and more. There are some great free online resources you can use to learn bookkeeping basics. You can watch YouTube videos, find books at your local library, or even sign up for a free course to walk you through the basics. It’s essential to learn the basics in order to accurately record your business’s finances and ensure tax compliance. Additionally, you can learn how to create your own business financial reports to help you plan for the future.
You may not know about this, but there are many accounting software programs out there that you can use to do your business bookkeeping. You don’t need to rely only on Excel spreadsheets! The most popular accounting softwares include QuickBooks, Xero, FreshBooks, Ambrook, and more. We may be biased since we use this software for our clients, but we recommend using QuickBooks for your business bookkeeping needs (this is not a promotion or sponsorship, we really just love QuickBooks!). QuickBooks is a popular accounting software choice. The software is easy to use, can automate a lot of your bookkeeping so you don’t need to do it by hand, and they have experts who can assist you and your books. They also have a free training on bookkeeping basics and on how to use their software. Pretty cool!
Now that you know a little bit more about bookkeeping basics and accounting software, let’s talk about monthly bookkeeping. To keep up with your business finances and to avoid year-end tax chaos, doing monthly bookkeeping is essential. Depending on how small or large your business is, and how financial activity occurs, monthly bookkeeping can be quick and straightforward, or it may require more time to complete. Typical monthly bookkeeping tasks include: data entry (transaction recording), receipt management, reconciling accounts, and preparing financial statements. If you also send invoices to clients and receive invoices from vendors, you will also need to focus some time on accounts receivable management and accounts payable management.
After reading about what goes into bookkeeping for your business, consider again if you have the bandwidth to invest in learning bookkeeping basics and accounting software, and if you have the time to commit to monthly bookkeeping. It’s not impossible, but it can be hard.
As a business owner, you already wear a lot of hats. Let us take one hat, and we will take care of your bookkeeping and finances, while you take care of your business. Contact us today!