There are many different options you can use for handling your bookkeeping as an entrepreneur. After looking at the options, you’ll need to decide which one you want to use. Remember, whatever you choose today you can always change later. The important thing to do is to ensure you pick a way from day one to keep track of your income and expenses.
Do It Yourself
Many small business owners and entrepreneurs choose to do their own bookkeeping. In fact, most people do start out that way when their business is small. Most people have no choice because it can be expensive to hire an accounting team when you don’t have any income coming in yet.
It’s important to remember that if you don’t have any training to be a proper bookkeeper, you’ll need to learn and educate yourself. A great resource for education on how to handle your small business bookkeeping is to read books on the subject written by people who understand and can write for people who don’t.
Also, you can choose some form of financial accounting software to help you. We’ll talk more about the options later.
Hiring a Bookkeeper or Firm
You can hire a bookkeeper both in person and online today. Look for someone who has experience and at least a certified bookkeeping certification. It also helps if they’re experienced with your type of business. The reason is that no one can be an expert on everything. But, they can be an expert in one thing.
The great thing about having a bookkeeper or a firm is that if you follow their instructions, you can keep your business organized without any problem – no matter how large your business becomes. But, you will have to manage your bookkeeper and check up on the firm to ensure that there are no issues with theft or mistakes. Even if the professional makes a mistake with your books, it is you who are liable if something should go wrong with taxes and other legal obligations.
Training Your Office Staff
When it comes to bookkeeping, you can actually train your normal office staff to do the data entry for you and handle bank reconciliation duties. You can even train a virtual assistant to deal with your bookkeeping needs if you have set up a system to scan receipts, and you use an online system to help give both of you access to the books.
The drawback to this is that they don’t really know what they’re doing outside of what you’ve trained them to do. If you have learned something incorrectly, you’ll pass on that incorrect knowledge to the assistant. One way to combat this is to hire a CPA firm to train your assistant to do your books correctly, based on how they set them up.
Some business owners prefer to hire a CPA firm. This is a firm full of certified public accountants. They’ll help you set up your accounts, and choose the software you should use and other aspects for you. Then, you can use one of their staff bookkeepers to double check your data entry (or your assistant’s) for accuracy on a periodic basis (usually monthly), to close out accounts and books.
This can be an expensive option, but since the CPA will likely be handling your taxes and other filings with the government, it can be very hands off and helpful. You will simply follow their instructions on how to keep track of everything and essentially hand it off to them. For some types of businesses, this can be overkill though, since it really is simple to do it yourself if you have a very simple business model.
Regardless of which option you choose, you’re still going to have to invest in some form of financial accounting software. All firms and bookkeepers will want to use the software they’re accustomed to using, so if you are going to hire someone, be sure to check with them before choosing software. If you’re doing it yourself then you can choose based on what you like best, your budget, and your needs.
*This article is not intended to replace professional business advice and planning. Always contact professionals regarding any business advice, financials, planning, operations, and/or management.