Small to medium business owners blow off their bookkeeping for another day for reasons of not knowing where to start with it all. Thinking about what it is, how often they need to do it, what they should be doing with it and everything else can add a ton of pressure. That pressure results in putting it away until you can ‘get to it.’
The Role of Bookkeeping
Bookkeeping services are the process of recording your business finances to keep things running smoothly from a financial standpoint.
One thing to take note of here is that bookkeeping is not the entire business financial system, and it is something people can get confused over very easily. Not every single financial task in your business is bookkeeping. It is about the keeping of records.
It is not just about tracking your income and expenses for your tax purposes – it also encompasses accounts payable and accounts receivable.
Record Keeping
We track income and expenses for taxes and our information about the business. When we file our taxes we are disclosing financial information to the government, but we also use business finances to make strategic decisions around money.
Doing your bookkeeping is not just tracking for taxes, it is also tracking so you can look at your finances and use the results to make good business decisions.
Accounts Payable
Accounts Payable is keeping track of money that you owe to other people. Depending on your business model and type, accounts payable can be something as simple as paying a virtual assistant each month or it could be more complex with multiple contractors and employees that need to be paid throughout each month.
You need to think heavily about your accounts payable system in your bookkeeping structure if you have a retail store or are in any situation where you are buying things from people with terms. This is what helps to keep track of when your bills are due so you can make sure your business cash flow is healthy.
Accounts Receivable
Accounts receivable is what your customers or clients owe to your company. The most common area of accounts receivable is your invoicing system – but it can be anything to do with how you get paid for products or services.
There are two main points in the accounts receivable process. The first is the billing part where you tell your clients/customers what they owe you, and then the part where you receive payments or follow-ups to chase payments.
A lot of business owners wonder why their billing system is in a mess, why they are always behind on their bills and why invoices are never paid. Most of the time it is because their bookkeeping is in disarray. This is why small business bookkeeping solutions are required.
Contact the team at Pebbles Bookkeeping today to catch up with your bookkeeping and organising your financials the way they need to be to grow your business.
