Being a business owner, you would have 101 things to manage to keep your business on the right track, one among these is focusing on your small business bookkeeping. It's the process of day-to-day tracking and recording your small business's financial transactions and documents for various purposes. For example, to effectively prepare for the tax season, monitor your cash flow, and so on.
Being a critical business operation, there happen to be certain myths about small business bookkeeping which the owners believe to be true. These myths not only lead to poor bookkeeping but also impact other business operations. Hence, let's bust these bookkeeping myths for other business owners to avoid in the future.
Top 4 Small Business Bookkeeping Myths You'd Avoid
As a business owner, you'd not pay heed to the following bookkeeping myths.
You can do the books and the accountant can review it
First things first, running a business and bookkeeping are two different things. If you're just starting up, have limited capital in hand, and thinking about doing the books by yourself, beware!
Without proper small business bookkeeping knowledge, you are most likely to make pricey errors at a later point in time. Hence, you must either hire a bookkeeping expert or an accountant who can manage your day-to-day books instead of just reviewing them.
Small business bookkeeping is only about data entry!
Bookkeeping earlier used to be a kind of manual data entry. However, it has evolved in line with the evolving businesses. Hence, today's bookkeeping is not just about manually entering the numbers. It's about automating the bookkeeping process through third-party software and easy-to-integrate solutions. These include Xero, QuickBooks, Sage, or MYOB.
Automation not only simplifies the small business bookkeeping process but ensures 100% accuracy at every step.
Bookkeeping is only meant for the tax season
"Bookkeeping should only be done when the tax season is around" is another small business bookkeeping myth that costs businesses heavily. Besides the tax season, well-maintained books are the top priority when you're:
● Applying for a loan,
● Making sound financial decisions,
● Handling cash flow, etc.
Hence, don't assume bookkeeping as a one-time affair of the year. Instead, focus on regular bookkeeping to stay over the top of your finances.
Anyone can do bookkeeping
Anyone can do bookkeeping, after all, it's all about data entry!
Let's bust this another widely common bookkeeping myth. A bookkeeper's day-to-day responsibilities include the following.
● Record every financial transaction and post them to various accounts
● Process payments
● Conduct daily banking activities
● Produce several financial reports
● Reconcile reports to third-party records such as bank statements.
None of the above duties are everyone's cup of tea. Hence, always hire a professional bookkeeper or outsource your bookkeeping operations to talented hands.
Conclusion
Bookkeeping can both make or break your business. What it does to your business depends upon how it's being done and by whom. For the best results, always trust a bookkeeping expert instead of laying trust over you or others, including your friends or relatives.
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