Starting and running a small business can be challenging, but it’s also very rewarding. As a small business owner, you likely have a lot of questions about bookkeeping and how to make your business more profitable. In this series of blog posts, we’ll answer some of the most common bookkeeping questions that small business owners ask. Keep reading to learn more!
- Why should I hire a bookkeeper or accountant?
One of the most important reasons for a business owner to hire a bookkeeper, accountant, or any financial professional is to save. You will save yourself time, money and frustration by hiring a professional whose expertise is in this area. Even if you feel comfortable and precise with numbers, it takes time away from growing and improving the business to have to manage the numbers as well. You will save yourself frustration and money, believe it or not, by avoiding mistakes that could cost you by simply not knowing.
- What are the most important financial statements?
The income statement (profit & loss), the statement of cash flows and the balance sheet are the three most common, and most important financial statements. These three are used to assess your business’s financial health and will provide the basis behind many business decisions that are in front of you. These include decisions regarding expansion, hiring, budgets and more!
- Shouldn’t my bookkeeper be local?
With today’s technology, the only need for your bookkeeper to be local is comfort. Sending and signing documents, preparing financial statements, meetings, and any other needs you have can be handled electronically. More importantly, there are secure servers available to keep your information safe and protected when you are sending them. Make sure anyone you hire has a portal or secure server to protect your financial information.
- What’s the difference between bookkeeping and accounting?
Bookkeeping and accounting are related, but not quite the same. Think of bookkeeping as recording what has already happened, like last month’s sales and expenses. Accounting, however, is the interpretation of that. In accounting, that information is used to forecast, project, and help the business owner make the right business decisions.
- Why is bookkeeping important for my business?
Simply put, if you don’t know where you are, you cannot possibly understand how to move forward. In order to plan ahead, reduce expenses or avoid repeating mistakes, you need to know what has happened so far. You also need to have the information that bookkeeping provides in the event of an audit, or in securing business funds from possible investors or creditors.
Take Action:
In this blog post, we answered some of the most common bookkeeping questions that our clients ask. If you have any other questions or would like to book a complimentary consultation with one of our team members, please don’t hesitate to get in touch. We would be more than happy to help you get your finances in order and start making money work for you!
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