However, bookkeeping as a term doesn’t necessarily include such long-term calculations and analyzes. Many small companies don’t actually hire full-time accountants to work for them because of the cost. Instead, small companies generally hire a bookkeeper or outsource the job to a professional firm.
Additionally, there may be other responsibilities based on the unique needs of your business. For example, a bookkeeper may be required to learn a specific accounting software system or participate in certain meetings. A payroll register is a record of each employee’s wage payment information for each pay date and pay period. It also includes information for all employees across each given time period, so you can easily view the overall totals. A small, family-run restaurant that’s registered as a sole proprietorship might be able to get by with some bookkeeping software and an annual meeting with their local accountant. But a growing retail business that’s run as an LLC in multiple states probably needs more complex help.
What is accounting in simple terms?
The bookkeeper enters relevant data such as date, price, quantity and sales tax (if applicable). When this is done in the accounting software, the invoice is created, and a journal entry is made, debiting the cash or accounts receivable account while crediting the sales account. Liabilities are what the company small business bookkeeping owes like what they owe to their suppliers, bank and business loans, mortgages, and any other debt on the books. The liability accounts on a balance sheet include both current and long-term liabilities. Accounts payable are usually what the business owes to its suppliers, credit cards, and bank loans.
Retained earnings are cumulative, which means that they’ll appear as a running total of money you’ve maintained since your business started. In all honesty, managing this account doesn’t take much time, so make sure you track it to see how much your business has grown. All of the products your business has in stock (whether they’re sitting at the back or still sat on the shelf) need to be carefully tracked and accounted for. This part is important because the numbers you have in your books should match by doing physical counts of the inventory on hand.
QuickBooks Support
This means recording transactions and saving bills, invoices and receipts so you have all the data you need to run reports. Accounting software makes it easy to store these documents and reference them in case of an accounting error or audit. Bookkeeping is the backbone of your accounting and financial systems, and can impact the growth and success of your small business.