Bookkeeping 101: Bookkeeping Basics for Small Businesses


Accounting and bookkeeping for small business

The software is also a good fit for service-based businesses, such as consultants, web designers and photographers. Wave is for sole proprietors and freelancers who need an online accounting service and may want a little room to grow. Integrated payroll and double-entry accounting support make it a potential option for small businesses with a few employees, though there are better choices for those companies. And because it has a simple user interface, even financial novices could use it.

For this reason, many businesses hire bookkeepers or accountants to maintain or review their books. Cloud-based online accounting software makes it convenient for businesses to access their books simultaneously as their bookkeeper or accountant. The mobile app makes it easy to track mileage while driving and capture photos of receipts for business expenses. This is helpful for freelancers who don’t have a separate bank account for their business activity.

Accounting software works by tracking transactions, handling client data, generating reports, and more, reducing mathematical errors and greatly saving time for accountants and business owners. Zoho also integrates with a range of popular apps, including the company’s own inventory management software, which can help streamline product tracking and prevent costly overstocks. This is a significant boon for businesses, keeping managers abreast of inventory status. Advanced analysis tools are at your disposal to help you understand your financial data, which is handy for small business owners. Its intuitive dashboard view and custom reports make it easy to get insights into your business’s financial health.

How to Become a Bookkeeper (A Complete Guide)

The software’s bookkeeping features include double-entry bookkeeping (the most accurate bookkeeping and accounting method), plus dozens of customizable reports. Using the data you gain from keeping a ledger, your next step will be to generate and prepare financial reports for analysis. The major reports to include are the profit and loss, the balance sheet, and a cash flow analysis. Additionally, the aged accounts receivables and aged accounts payables reports are helpful in knowing which customers have not paid and which vendors are yet to be paid. These reports will help you gain greater insights into the financial health of your small business. Xero is one of the most popular accounting software for small businesses.

4 of the best payroll services for small businesses – CNBC

4 of the best payroll services for small businesses.

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FreshBooks comes out on top as the best accounting software for small business, with a boatload of leading-edge accounting features. It has great features for time tracking and expense management and robust automation and integration tools. With QuickBooks’ unique inventory management, you’ll gain critical insights for business growth, like identifying best-selling products — so it’s not just a tool for balancing the books. Plus, it offers an in-house payroll service as an add-on, which is highly convenient for any growing business with multiple employees. It has a smorgasbord of features, a capable mobile app, powerful automation, and advanced inventory management capabilities.


Every year, we test and rate the top web-based accounting services. Some are better for sole proprietors, freelancers, and companies with only one or two employees. Below you’ll find summaries of these applications, with an explanation of what makes them differ, along with what to look for when choosing the right software for your business. We also include links to the in-depth reviews of each software if you want to learn more.

What Is Double-Entry Accounting? – Nav

What Is Double-Entry Accounting?.

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Wave is an ideal accounting software platform for a service-based small business that sends simple invoices and doesn’t need to run payroll. At year-end, accountants can pull the necessary reports from Wave to prepare a business’s tax return. Here are our top five picks for the best accounting software for small businesses. Bookkeeper360 integrates with third-party tools, such as Bill, Gusto, Stripe, Shopify, Xero, Brex, Square, Divvy and ADP. These integrations make it easy to track your bookkeeping and accounting data in one place. It also offers full-service bookkeeping, meaning that its team will do the bookkeeping for you.

Best Accounting Software for Small Business Needs – Top 10 Compared for 2023

Time tracking features are available as an add-on, making it simple to view how much time is spent on projects and ensuring billing accuracy. Plus, Sage lets you collaborate with your accountants and bookkeepers, too, if you need assistance. Xero’s convenient mobile app lets you send invoices directly from your phone while on the go, and it’s simple to automate payment reminders to clients so you don’t have to chase them down. What’s more, automated reminders, managed recurring payments, and direct transactions are all streamlined in one place, which lets you spend less time on redundant tasks and focus on growth. Getting paid is simplified as well since Zoho accepts payments from many of the top payment gateways.

Accounting and bookkeeping for small business

Intuit has an option called QuickBooks Live that adds bookkeeping support to Intuit QuickBooks Online Plus. You communicate with a dedicated bookkeeper through one-way video chat (they can’t see you) or email. This individual and their team work with you on customizing your setup and monitoring your transactions so they’re accurately entered and categorized for tax purposes. They reconcile your accounts and close your books at month’s end to prevent errors. Plus, they’re available for questions during regular business hours. Finally, they generate the reports you need so you’re ready to prepare your taxes or hand them off to your accountant.

Setting Up Your Accounts Receivable

Once you have completed an invoice, for example, you have several options. You can save it as a draft or a final version and either print it or email it. If you do the latter and have established a relationship with a payment processor, then your invoice can contain a stub explaining how the customer can return payment via credit card or bank withdrawal. You can create a PDF version of the invoice, copy it, record a payment on it, and set it up to recur on a regular schedule.

We use product data, strategic methodologies and expert insights to inform all of our content to guide you in making the best decisions for your business journey. Make sure to tackle your books when your mind is fresh and engaged—say, at the start of the day before you open your doors rather than late at night, after you’ve closed up shop. You want to be at your best when you’re looking at figures that explain your business’s profitability and help you chart a course for progress.

Otherwise, monthly pricing starts at $399 and weekly pricing starts at $549 per month. Online bookkeeping services can save business owners both time and money. With hundreds of options, however, it can be daunting to sort through them all and find the best service for your business. We’ve analyzed the best bookkeeping services to help you find the right solution quickly and easily. We selected these services based on their service options, pricing, customer service, reputation and more. QuickBooks Live connects bookkeepers with small businesses that need help doing their books.

Accounting and bookkeeping for small business

Despite these challenges, accounting software can be a valuable tool for businesses of all sizes. When choosing accounting software, it’s important to consider the needs of your business and compare different features to find the best fit. Neat is a good choice for self-employed entrepreneurs who need an easy-to-use accounting software to manage their business finances.

QuickBooks Self-Employed

Business owners who don’t want the burden of data entry can hire an online bookkeeping service. These services are a cost-effective way to tackle the day-to-day bookkeeping so that business owners can focus on what they do best, operating the business. For business owners who don’t mind doing Accounting and bookkeeping for small business the data entry, accounting software helps to simplify the process. You no longer need to worry about entering the double-entry data into two accounts. If not done at the time of the transaction, the bookkeeper will create and send invoices for funds that need to be collected by the company.

Finding the right level of cash to be kept on hand requires a proper cash flow forecast and cash monitoring. Businesses might not want to keep all cash in the bank, as having an excessive amount of cash in the bank could mean missed opportunities in investment income. Efficient bookkeeping involves foresight, meaning that a business should always plan for upcoming financial events, including tax time. Good preparation and documentation are critical for paying taxes (including payroll taxes) on time.

  • It’s missing some features that competitors offer, and it includes some language and concepts that rivals keep in the background, but it’s a solid, inexpensive solution.
  • It starts at $15 a month and includes access to limited reports, plus freelance-specific features like mileage tracking and easy syncing with TurboTax.
  • You can also match related transactions, such as an invoice that was entered into the system and a corresponding payment that came through.
  • If you’re in need of the easiest ones, however, QuickBooks Online and FreshBooks are the two we recommend.
  • Unlike accounting, bookkeeping does not require any certifications.

And avoiding spending any money when you think you can just take care of a task yourself is tempting. Whether you take on your small-business bookkeeping yourself or end up outsourcing to an expert, understanding the basics will help you better manage your finances. You’ll save time chasing receipts, protect yourself from costly errors, and gain valuable insights into your business’s potential.

Accounting and bookkeeping for small business

While most accounting software is easy to use, a general understanding of accounting principles is needed to ensure that financial reports are prepared correctly. The Select plan also does not have a limitation on the number of clients that can be billed per month but adds unique features. Bookkeeping is the regular practice of updating a company’s financial records to reflect all financial transactions, credits, and debits.