Bookkeeping for small businesses is an extensive responsibility that handles the recording and reporting financial transactions.
The bookkeeping process takes into consideration all of the invoices, documents and accounts within the business’ workflow. While people often confuse bookkeepers for accountants, the former generally focus on tasks which directly affect the operational management of a small business' cash flow, while the latter deals with functions more related to financial data analysis.
Every business, big or small, must keep track of its income. It’s crucial to know the company’s financial status and be able to access important information in real-time. As a result, less time spent on bookkeeping means more time can be spent on the running of the business.
Small business bookkeeping software makes life easier for bookkeepers and people dealing with the business’ daily transactions. It allows the automation of bookkeeping records, lets users work remotely using their phones, produces automated reports and tracks financial statements. Through these solutions, less time is wasted on manually inputting details regarding the entire business’ financial information and more time spent on making smart decisions regarding the flow of the business.
In small businesses, tasks involving the management and organization of reports, documents, invoices, income and expenses are often all the bookkeepers’ responsibilities. However, many small businesses that don’t have dedicated employees functioning as bookkeepers do exist, meaning other employees are required to wear multiple hats. The solution to this labor deficit comes in the form of small business bookkeeping software, which is a more reliable and faster way of staying on top of key responsibilities.
This type of software possesses a multitude of features and functions catered directly to fit your small business’ bookkeeping needs. In bookkeeping, it is essential to keep a thorough record of the different transactions processed on a daily basis. This includes tax rates, contact lists, payroll records, purchase orders, assets, liabilities, etc. All of these transactions are important in building a complete financial report for accounting purposes. Additionally, documents such as the balance sheet, profit and loss statements and cash flow statements are important factors to track for financial success.
With this in mind, think of bookkeeping as the backbone supporting your entire company - a crucial part of your business that helps other branches (such as accounting and finance) function efficiently. This is why most small businesses make use of bookkeeping software. It provides ready-made features that simplify and automate otherwise time-consuming work.
One example of a small business bookkeeping software vendor is FreeAgent, a cloud-based accounting solution designed specifically for freelancers, accountants and small business owners. It has features tailored for designing estimates and invoices, tracking records, monitoring cash flow, importing transactions as well as providing an overall view of a business’ performance.
Here are the following key features small business bookkeeping software offers:
This feature ensures it takes no time to send invoices as soon as a job is done. With this feature, it is significantly easier to know how much each job order costs and when the customers pay for said products or services.
With small business bookkeeping software, online invoicing can also become an option. This further opens up more payment methods for customers to easily use such as credit cards, debit cards and ACH bank transfers. This makes it easier for customers to pay for the products or services that they have bought.
Alongside this option is the addition of the billable hours and instant notification features. By recording billable hours, it becomes easier to manage employee payroll. In terms of instant notifications, late payments can be eliminated since you will be notified in real-time when a customer pays and what payment method they used.
This feature refers to being notified in real-time on any updates to your business’ cash flow and financial transactions through the connection of several account receivables. Most software solutions support popular banks, giving your customers a wide variety of payment methods to choose from. However, without an efficient bookkeeping tool to track and interpret these bank transactions, it can be difficult for a small business to stay in control of income and expenses.
Furthermore, this feature helps in understanding and explaining the cash flow going in and out of every account. It also helps in matching up invoices and payments. This provides an interactive balance chart of all the business’ accounts and “explains” the transactions based on previous descriptions.
The inventory tracking feature manages the flow of goods and products while also accounting for real-time stock evaluations. As the business grows, more products and services are sold to vying customers, which means stock, or available quantities need to be updated constantly. This is what this type of software assists in — preventing stock shortages and allowing business owners to always be aware of any potential supply issues.
The software solution saves time, cuts costs and offers budget and forecast insights. By having your inventory properly maintained and updated, you can make strategic decisions regarding the manufacturing of your products or services. Furthermore, the feature gives you access to reports on the best sellers, total sales and total taxes involved with your inventory.
Traditionally, bookkeepers within small businesses have a wide range of responsibilities relating to collecting payments for the business and issuing invoices to customers. They can often be expected to constantly be on the move, especially for businesses offering field services. As a result, mobile bookkeeping software aids small business owners in managing their transactions anytime and anywhere. This is especially helpful during trips to other remote locations where access to a computer might not be available.
What this also allows is for an integrated interface across different channels and units. As long as you have the software solution installed on your device(s), it will be easier to access crucial information.
Through the help of small business bookkeeping software solutions, recording transactions and tracking financial information has never been easier for small business owners and employees. Basic bookkeeping has always been a relevant source of information for several branches of a business, particularly including accounting and finance.
A good bookkeeping software solution allows small business owners to analyze and compare sales revenue and to monitor their budget in terms of products or services. Over time, this allows the business to grow with a reliable, existing automated software system designed to help in recording, tracking and interpreting numbers and data to improve the overall cash flow and operational efficiency within small businesses.