Owning a business is not all about the workflow; you will also need to ensure that its finances are flowing effectively, and this may mean learning how to do online bookkeeping.
However difficult this may be in the current situation, keeping your business afloat and stable is essential. You should look at your bookkeeping approaches and review these regularly to ensure that you work within your country’s proper guidelines or local area.
Online bookkeeping: What does it entail?
Bookkeeping is a process of maintaining your financial records and monitoring all of your business’s transactions. The systems you put in place do not need to be complicated or convoluted; the simpler, the better.
Your journey into taking control of your business’s financial picture can be effortless. To take a DIY approach, all you will need to do to start bookkeeping is download a suitable bookkeeping app. The more time you can commit to the process, the more straightforward and seamless it will become. You can practically take the reins of your finances and ensure that your business needs are met, even before you approach your accountant.
6 Simple online bookkeeping steps
Not all bookkeeping is the same, and there are some research and learning to start the process. You should consider reviewing the steps below to begin:
Step 1
● What is the Difference Between Bookkeeping and Accounts?
To do your bookkeeping or accounts, you do not need to have formal qualifications or be loaded to the hilt with degrees.
However, know the difference between the two can help you cut costs and time, which are both vital commodities to your keep your business functioning.
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Accountant
An accountant’s role is to oversee your accounts, financial records, and any related financial data for your business. An accountant will also be able to steer you in the right direction and make sure that you are accurately keeping records and accounts. You should also receive support with your tax returns, and they will manage your funds to comply with the law.
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Bookkeeper
A bookkeeper is someone who can help you keep accurate financial records and data. They can also ensure that you record all your financial entries correctly and organize your financial records weekly, monthly, or quarterly.
Step 2
If you decide to take a DIY approach, you should look at all of the available options. If, however, this does not work for you, take a look at Bench online bookkeeping. Bench accounting services offer, and their bookkeeping system is user friendly and easy to master and support all of your business needs.
Step 3
Types of Bookkeeping
Here are a few types you should look at to begin your journey.
- Cash
- Accounts Receivable
- Inventory
- Accounts Payable
- Sales Ledger
- Purchase Ledger
- Payroll Expenses
- Loans Payable
- Retained Earnings
- Profits/Loss
Step 4
Effective bookkeeping
- Keep your record-keeping smart and tidy.
- Maintain all of your receipts and keep copies via software.
- Keep your business and personal finances completely separate. If these merge, you could end up having to explain this to the taxman or, even worse, be fined.
- Do not leave everything until the last minute. Plan and factor this into your business activities, updating your records every week. This will reduce the risk of error and costly mistakes.
Step 5
Trying to get your head around all of the terminologies may seem daunting, but you can do this effortlessly. Here are a few terms that may help make maintaining your books and accounts efficiently.
- Chart of accounts
A full-list of accounts to help your business categories finances.
- Trial balance
A ledger is comprising a debit and credit column.
- Expenditure
These are the transactions leaving your business in the form of paying for items purchased.
- Profit and loss
This is a financial report that balances the revenue and expenses for a period of time.
- Balance sheet
A report of the business’s financial picture. The balance sheet includes the following aspects: assets, liabilities, and companies working capital.
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Expenses
These are finances that can be fixed, variable, accrued costs, and expenditure daily, defining the business’s financial flow.
Step 6
Here are the essential tips to make sure that you maintain your bookkeeping and business accounts easily:
- Be familiar with bookkeeping and accounting terms and phrases.
- Create bookkeeping and accounting checklists.
- Research well and learn all you can via networking with colleagues.
- Take advantage of tutorials and YouTube lessons.
- Use a bookkeeping or accountancy App, that you can understand easily and that is not going to leave you with sleepless nights.
Final words
Once you have mastered these 6 basic steps of undertaking online bookkeeping, you are now ready for business success and streamlined financial flow.
