- June 14, 2023
Bookkeeping is one of the most important parts of any small business. It is a process consisting of recording, organizing, and maintaining financial transactions systematically. These transactions and records help you understand the financial health of your business thus you can make well-informed decisions. Hiring a bookkeeping virtual assistant can help to ease your workload.
Initially, bookkeeping for small businesses seems like an easy task. But as your company grows, you could get way too busy or it might get too complex for you to handle on your own. This is when hiring a Quickbooks Remote Bookkeeper expert can be helpful. These experts can offer top-notch services to manage all your finances effectively.
Whether you want to handle the books yourself or delegate that task to a remote bookkeeping services agency this blog from CROX RPO will help you to grasp the basics of bookkeeping that every business owner should know about.
Why is Bookkeeping crucial for small businesses?
Whether you take care of the bookkeeping yourself or outsource it to a bookkeeper or small business assistant, it is quite obvious that your bookkeeping is done correctly. Here are some reasons why remote bookkeeping services are essential for small businesses.
- Splitting your business and personal funds guarantees that you are personally accountable for any debts or legal hassles arising from your company.
- Monitoring a company’s financial health makes you familiar with the areas of improvement or changes.
- Bookkeeping for small businesses helps in finding errors early on by monitoring payments, and reconciliation helps to prevent problems in the near future
- It is possible to save money and simplify all the accounting services for small businesses by optimizing tax processes and partnering with tax experts.
- Properly maintaining paperwork and data makes processes like qualifying for a loan quite easier.
7 Bookkeeping Basics for Small Businesses
1. Pick a Bookkeeping Entry Method : Remote bookkeeping companies offer two types of services i.e., Single entry and double entry. It is very essential to finalize a technique before you begin maintaining financial transactions. The method you select influences how you have entered all the transactions.
- Single Entry- It is accounting that is used in basic bookkeeping. Each transaction must be recorded only once in your bookkeeping record. This approach suits remote bookkeeping companies and freelancers to a handful of business transactions
- Double-Entry Accounting- This is more complicated but more durable and better suited for businesses that have progressed beyond the home office stage with few monthly orders. All of these transactions are under double-entry bookkeeping.
In both of these methods, double-entry bookkeeping is often recommended for small business owners. You can hire a bookkeeping virtual assistant from CROX RPO in both these methods.
2. Set up a general ledger to record transactions- Previously, firms would keep track of their financial activities in books known as the general ledger. That concept is outdated and general ledgers are now primarily virtual.
There are multiple methods for creating a general ledger virtually. In this google sheets are the most accessible and affordable. However, compiling multiple accounts can make the process a little complex, especially if the size of your business increases. Thus, businesses can hire a virtual assistant who can help them to manage their accounts and books efficiently.
3. Segregate your expenses into business and personal- Open a corporate bank account and keep your personal and business expenses separate. There are multiple reasons for this.
One major factor is liability. For instance, suppose you can run a business or LLC from the same account and mix finances. In that case, there is a chance that you might be held personally accountable for any debts or financial trouble your business gets into.
Taxes are also a significant factor for any individual. This is the reason why you shouldn’t combine your personal and business accounts. A company cost may end in your personal account, causing you to miss out on a significant tax reduction.
4. Accurately Record Transactions- Once you have established your financial accounts and chosen a bookkeeping system, you must be tracking your finances. In addition to getting the data in mind, you need to select accounts that will be debited and which will be credited.
Each transaction must be well documented and the correct amount to get the correct picture of the company.
5. Keep Accounting statements Updated- When doing bookkeeping for business, make sure to keep your accounting statements updated at regular intervals. This would help you to track your final progress and make informed decisions based on accurate data at any point.
6. Ensure your accounts are well balanced - All the debits and credits should be well matched at the end of the month, quarter, and year. This indicates that your books are well-balanced. To keep it short and crisp, keep this formula in mind Liabilities + Equity Assets. As an entrepreneur, you can’t afford to make mistakes and lose time. Therefore, hiring a home business bookkeeping assistant is advisable to ensure your accounts are balanced correctly.
7. Make Bookkeeping Habit- Like everything else in the business, it would benefit you greatly if your books were maintained with a proper schedule. This will certainly be uniform and give you a sense of stability and security in your finances. It will also help you prevent all future issues.
How to Manage Bookkeeping?
Here are three simple steps to manage bookkeeping
- Allocate Transactions to Specific Accounts- To get started with basic small business bookkeeping it is very essential to allocate each important transaction to the right account. This means sorting out transactions based on sales, purchases, and expenses.
- Do journal entries for debit and credit accounts- The next step is how bookkeeping for small businesses involves making journal entries. A debit card shows money is coming into your business. On the other hand, credit cards show all the expenditures. Making journal entries is essential for tracking the businesses’ finances actively and accurately.
- Post entries to ledger account- Once you have allocated all the important transactions, it’s time to post them in the ledger account. This account is a record of all transactions for the particular account, and it gives you an overview of the financial activity.
This was all about how a Bookkeeping Virtual Assistant can help and some basics of bookkeeping for small businesses. As a small business, you can hire a virtual assistant who can take care of all your bookkeeping requirements and hustles.
To hire one, you can connect with the experts at CROX RPO. Our team is here to help you out.
FAQ’s Related to Bookkeeping Virtual Assistant Services
Can virtual assistants do bookkeeping?
Yes, there are many virtual assistants who are ready and experienced to take on bookkeeping tasks for you. These include taking care of all the bills on time, preparing balance sheets, and much more.
Are virtual bookkeepers in demand?
The answer to that question is a big yes!! Bookkeepers are well in demand as most businesses and freelancers are looking for individuals who can take care of all the account's work.
Which business needs a virtual assistant?
Any business owner or CEO who is way too busy with their work requires the services of a virtual assistant. Anyone who requires support to ease their workload and improve their productivity can be highly benefited from virtual assistance services.
What is the biggest challenge as a virtual assistant?
As a virtual assistant, the biggest challenge is communication since it is a backbone virtual assistance service.