Business Bookkeeping

Business bookkeeping is the process of keeping track of the expenses and income of your business to know how much money you are making, pay your expenses and suppliers, provide payroll for your employees and handle taxes including deductions.  You can find various software packages for handling the bookkeeping needs of your business by searching online, or you can hire a firm, an accountant, or a bookkeeper to keep track of this for you.  Hiring someone is usually more expensive than doing it yourself, but this a choice that may be right for you if you've never done business bookkeeping before or you simply don't have enough time to do it yourself.

The purpose is to keep track of all the money that flows into and out of your business in a structured format on paper or in electronic form.  Bookkeeping can help you total up all of your expenses as well as all the money you are making to understand if you have a profit or loss in your business.  It's important to keep track of your expenses, since the easiest way to be profitable is often to have fewer expenses than to bring in more money.  Some of your business expenses may have some influence on your taxes and keeping track of them along the way can save you time when tax time comes around in terms of getting everything organized and documented. 

Bookkeeping can also help to manage your businesses accounts receivable and accounts payable.  In many businesses, you don't get paid the minute you provide a service or ship a product.  Instead, you may send an invoice to the customer.  Bookkeeping software can help create these invoices, and keep track of them over time so that you can know who has and has not paid you, and also understand what your cash flow will be in the coming weeks:  You need cash and not outstanding invoices to pay your employees, so keeping track of your outstanding invoices and accounts receivable may be the difference between being able to pay your employees on time or not.   Accounts payable is also important for a business: when you are billed for a service or a product through an invoice or a bill, it can be easiest to simply that bill right away.  On the other hand, waiting until closer to the payment deadline can help a business better manage its expenses, but also want to be sure that the payments are not late since this can lead to costly late payments.  Business bookkeeping can help you keep track of your business's unpaid invoices and outstanding bills owed to have the best possible cash flow and make sure that you can meet all of your critical expenses like paying your employees and making rent payments.

Bookkeeping for your business may include also taking care of payroll for your employees.  For many businesses, the people they employ are absolutely critical to being able to run the business successfully and paying them on time and accurately can help make sure that they stay happy and remain at your business.  Unfortunately, handling payroll can be complex due to handling withholdings, taxes and payroll withholdings.  Even worse, the penalties and fees for inaccurate or late payroll tax filings are significant and it's important for all businesses to pay on time.  A bookkeeper or bookkeeping software can help make sure that the stress involved is kept to the minimum and that everything is done correctly and sent on time.