Small business accountants can be an integral source that provides help and advice to manage the process. An accountant can also help the small businessman in inventory management, business financing, pricing and also determines the area for growth by providing Cash Flow patterns. You could even find an accountant for link tok scripts. When a person starts up a business there are lots of systems he needs to set up and many actions he needs to perform to create a foundation of a successful businessman. Here, the small business accountants will help you out with the following points given below.
- Determines the structure of business such as sole-proprietor, partnership, corporation, etc.
- Assist your business plan with the financial analysis.
- Advice you on the Accounting Software you may need.
- Explain to you the importance of keeping the business and personal expenses separate.
- Let you know that ho to track expenses during the activities on your daily business.
- Provides you assistance on opening the business bank account.
What Is the Process of Doing Accounting for the Small Business?
The process of doing accounting for the small business is by keeping the records of all the expenses and income accurately and also extracting the financial information from the transactions of the business. Maintaining, tracking, and manage the records of all the transactions in day-to-day routine is the important work performed by the small business accountant.
Important Steps of Doing Book-Keeping for a Small Business.
Important steps of doing bookkeeping for a small business are explained below:
- Analyzing Financial Transactions: the first step involved in bookkeeping starts with analyzing the financial transactions and making the entry of every individual of the business entity through the accounting system.
- Journal Entries: Using the double-entry book-keeping system, the business transactions are recorded in the book called Journal which includes two accounts- Debit & Credit.
- Ledger: Maintaining the accounts which display the changes in each account which are based on past transactions along with the current balanced in each account is known as Ledger.
- Trail Balance: it is prepared to make sure that the total debits are equal to total credits. Trail balance helps to make the debit and credit columns to be equal and if it is not then the trial balance contains some error that has to be rectified. These errors may exist due to the omission of the entries or by double-posting.
- Adjusting Entries: the accountant has to prepare the adjusting entries at the end of the accounting period that are summarized in the financial statement to upgrade the accounts.
- Adjusted Trial Balance: after adjusting all the entries, the adjusted trial balance must also be prepared by the accountant at the end of the financial year. It will help to detect that whether the debit matches the credit or not after the adjusting entries are made.
- Financial Statement: The financial statement includes income statement, balance sheet, statement of cash flow, etc are noted at the end of one financial year.
- Closing Entries: it is prepared for the next accounting period. The temporary accounts that are measured periodically are closed including all the expenses, income, and withdrawal accounts.
How to Set a Small Business Accounting System?
To set a small business accounting system a person must need to acquire the following steps:
- First of all, he has to choose an accounting method whether cash-basis or accrual-basis.
- Record each transaction on daily basis.
- Compile a chart of accounts.
- Determine your payment term.
All these steps will help you to manage your accounts as well as properly maintain your accounting system.
