Top 5 Accounting and Bookkeeping Services Your Small Business Needs

Upon deciding to launch a small business, you’ll quickly be confronted with the cold, harsh reality of bookkeeping and accounting for that small business. It can be a lot of work to handle the financial elements that go into how to do bookkeeping for small businesses. There’s a lot of room for error when first starting out, and it’s important that your small business accounting services are handled correctly come tax season.

As such, we’ve compiled a guide for the top 5 accounting and bookkeeping services your small business needs to function properly over time. We’ve provided answers on how to do bookkeeping for small businesses and what small business accounting services you should be mindful of as you operate your organization.

How to Do Bookkeeping for Small Businesses

Let’s begin by going over how to do bookkeeping for small businesses. With the development of bookkeeping and accounting technology, bookkeeping tasks have become more automated. However, this doesn’t make it any less important to ensure you set everything up properly from the start.

Firstly, you’ll want to either set up an accounting/bookkeeping software or hire a small business accountant. This’ll cover connecting business bank accounts, doing any necessary data entry, and reconciling transactions. Accountants for small businesses (or accounting software) will check for any errors in your financial data reporting as well.

Next, you’ll want to choose an entry system for how to do bookkeeping for small businesses. Bookkeeping services for small businesses require you to choose between single- or double-entry accounting. In short, single-entry accounting records all of your transactions once, either as an expense or an income. Double-entry accounting enters every transaction twice, as both a debit and a credit, to “balance the books” between accounts. Although more complicated, it can prevent errors in recording transactions. The entry system you choose impacts how you manage your finances and how your bookkeeping processes will work.

Then, you’ll manage transactions. This’ll either be done yourself with an accounting software or through a chosen small business accountant. This includes importing and categorizing transactions properly, reconciling these transactions and making sure they’re recorded according to your entry system and accounting method.

Finally, you’ll be left with setting up payroll and preparing your financial statements for tax season. You can process payroll with some accounting software, though most small businesses choose to do so with a small business accountant or a chosen payroll software. If you want our top picks for payroll software for small businesses, you can check out our article here.

Why You Should Use Small Business Accounting Services

Though the steps listed above are simplified for small business accounting services, they highlight the importance of accurately managing the financial aspects of your business. Accountants for small businesses and accounting software are designed to make running your small business easier. They ensure that revenues exceed expenses, keep the books clean, and ensure all necessary taxes are paid.

Not only that, but bookkeeping services for small businesses help business leaders and key stakeholders know exactly how the business is currently performing and make informed predictions for the future. It helps small businesses better pivot after unseen changes and eliminate extraneous costs to better boost revenue performance.

Top 5 Accounting and Bookkeeping Services For Your Small Business

Now you’ve got a basic grasp on how to do bookkeeping for small businesses and the importance of setting up accounting software or hiring accountants for small businesses. Let’s go over the top 5 accounting and bookkeeping services your small business needs. These services ensure accurate bookkeeping and accounting happens as your business grows, regardless of whether you’ve hired a small business accountant or not.

Separation of Business Transactions and Personal Transactions

One of the most common bookkeeping errors small business leaders make is mixing their business and personal funds together. Although many owners self-fund their businesses, business revenue and expenses must be kept separate from personal finances. Doing so makes tax season simpler and avoids the potential for costly accounting errors.

Here are some tips for keeping business and personal accounts separate:

1. Establish your company as a distinct legal entity, such as an S corporation or LLC.
2. Open a business checking account and pay yourself a salary from it each month.
3. Get a business credit card for expenses you don’t want to pay cash for.
4. Open a business savings account as a rainy day or investment fund.
5. Monitor personal item usage. Track any business usage of your personal items.

Properly Classify Your Workers as Employees or Contractors

As a small business owner, you’ll be responsible for managing the payroll of the people who work for your business. These workers can be categorized as standard employees or as contract workers. Each category comes with different requirements for taxes, benefits, and payment frequency. As such, be sure to categorize your workers according to whether they’re employees or contractors.

Create Profit-and-Lost (P&L) Statements Regularly

Regularly staying on top of your bookkeeping services for small businesses will ensure you’re easily able to file accurate tax returns. It also ensures that your actual revenue matches with your projections. If it doesn’t, you’ll be able to quickly assess and retarget if continuously drafting these statements. Regularly creating P&L statements is great for making sure you’re on the right track.

Always Keep and Organize Receipts and Invoices

Keeping and organizing receipts is key to guaranteeing that you’re accurately accounting for all payments and invoices going in and out of your business. As a small business owner, you’ll come to realize that vendor payments and customer invoices will grow in frequency and amounts as your organization grows. Be sure to keep track of and organize your receipts. The better you are at organizing your payments and invoices, the easier it will be to draft accurate financial statements and file your taxes.

Stay on Top of Deadlines

The final pick for our top 5 accounting and bookkeeping services your small business needs is all about setting deadlines and meeting those deadlines. This most commonly applies to tax season and meeting the deadline for filing your tax returns. However, this can also apply to monthly deadlines for financial statements. Here are some bookkeeping items that you as a small business owner should make deadlines for:

• Monthly reconciliations
• Year-end reconciliations
• Monthly or bi-monthly P&L statements
• Annual tax returns
• Daily deposits
• Weekly bank transactions (statements)
• Monthly accounts payables statements
• Monthly accounts receivables statements
• Monthly review of payroll records

You won’t be required to keep deadlines for all of the above if you choose to outsource these items to a small business accountant or accounting software. However, still be mindful of the above and check in frequently with your accountant or software on the status of the above items.

4Corner Small Business Accounting Services in Denver, CO

We know that accounting for small businesses can get complicated quickly. That’s why 4Corner Business Service’s team of experienced accounting and small business consulting experts provide you with the tools and financial information you need to make critical business decisions as the owner of a small business in Denver, CO.

Allow us to be the experts on bookkeeping services for small businesses so you can focus on growing your company. In addition to bookkeeping for small and large businesses, 4Corner offers payroll help, support in choosing and using accounting software, professional tax services, and valuable financial advice to guide decision making. We help businesses both large and small implement proven growth strategies so you can turn our small business consulting services into revenue successes.

We’ll take the guesswork out of hiring accountants for small businesses so you can tackle more. If you have any additional questions, feel free to contact us at 4Corner Business Services. You can set up a meeting with Phil Zavala, founder of 4Corner, to get you on the right track.