Guide to Small Business Bookkeeping

If you are thinking of setting up a small business and hence becoming a business owner, you are an entrepreneur and just creative, but not an accountant. It is best to leave the job of bookkeeping and accounts to someone else. That someone must be one who knows tax and also has all the software for accounting as well. Like, if you want to know more about small business bookkeeping in Sydney, choose MicroChilli. They provide bookkeeping services in Sydney and from CBD to the suburbs, and they specialize in meeting all the unique requirements of small businesses.

What is the work of a small business bookkeeper?

Good bookkeeping is a crucial part of accounting in any business which is concerned with the organization and collection of financial documents. The main job of a bookkeeper is to gather, organize, and file each bit of data that is related to your company’s financing. The bookkeeper is responsible for compiling:

  • Receipts
  • Invoices
  • Bill statements
  • Payroll records
  • Tax returns and forms
  • Credit card and bank statements

Importance of small business bookkeeping

  • Tracking profitability: Tracking the profitability of your company allows you to follow your earnings and then plan for methods for improving it in the future. Profitability measures permit you quickly and easily track transactions and find out how much would earn on inventory. A few great profitability ratios which let you access your company’s efficiency are:
  • Profit margin
  • The ratio of gross margin
  • Return on equity
  • Return on your asset ratio
  • Return on capital employed
  • Bookkeeping can help you to prepare for taxation: If you are running a start-up, you could easily save time by simply recording all your transactions as and when they come up. This will save you from tracking some important financial information, especially at the end of the financial period at the last minute. By having proper bookkeeping, you could find out the kinds of taxes and also calculate the amount that is payable in advance as well.
  • Improved financial management & maintaining cash flow

As a responsible owner of a small business, you must be aware of a company’s revenue streams. With efficient and accurate bookkeeping, you can easily find out how much your business is earning where income is concerned. You can also track your spending as to make sure you have sufficient cash available for covering your business expenses. Accurate financial records make it simpler for you to analyze the financial position of your organization and find out areas that need improvement.

  • Easier reporting

Being a business owner, you are only holding the responsibility for reporting important financial data about your company to potential investors as well as other stakeholders. The bookkeeping programs which incorporate charts, graphs, and others make it easier to increase data precision and improve communication if you want to woo investors.

If you want to know more about small business bookkeeping in Sydney, contact MicroChilli today. It is the home of specialist small business bookkeeping as well as sole traders. Whichever package interests you; they provide on-call support and all-in-one bookkeeping at affordable monthly rates all across Australia.