The bookkeeping process for a small business gets about as much respect as the children’s table at a big family reunion. You know it’s there, but coordinating the details isn’t too important.
The excitement in business is conducting sales, creating marketing campaigns, implementing new technology, improving efficiencies, and expanding with new products or services. But bookkeeping is crucial. Business managers who give bookkeeping the attention it deserves are more likely to succeed in both good times and not-so-good economic environments.
Before assigning your bookkeeping process, evaluate the situation for your business. Maybe you or someone on your staff can handle the bookkeeping along with other tasks. But don’t stick just anyone with the assignment. Select a person with bookkeeping ability.
If you’re just getting started or you conduct business as an independent contractor, you might want to do the bookkeeping yourself. Take the responsibility seriously. Read a book or take a course on bookkeeping for nonaccountants. Then get a CPA to periodically check your work.
If you don’t understand double-entry bookkeeping and can’t determine whether to debit or credit an account, stay away from the bookkeeping and hire a professional.
Accurate bookkeeping gives clarity to your financial situation, allows for better planning, helps you avoid cash-flow problems, improves your ability to borrow or raise capital, and facilitates audit-proof tax preparation.