How To Handle Your Small Business Accounting
When you open your new home improvement business, you enter a whole new world of financial accountability. You have to keep track of supplies you purchase and goods and services you offer, pay yourself and any employees or contractors, and stay ahead of filing dates for various tax forms.
Fortunately, even a small business has easy access to inexpensive accounting software to supplement or replace an accounting service. Should you try to handle your accounting yourself? If you do, what should you use?
Should You Work With A Professional?
Many people starting out in business lack the skills to set up and maintain an accounting system to cover all these bases. Small businesses usually try to keep their expenses at a minimum, which is why the business owner or their spouse or their Aunt Susan who knows a little bookkeeping often handles the books. With the free and low-cost software available to small business owners, this can be an acceptable way to keep records so long as the person doing the job is accurate, trustworthy, and competent.
However, if you choose to work with a professional accounting firm, they can:
Give you an idea of your progress
Alert you of impending financial problems
Provide you with accurate records when you file taxes
Accurately sum up your income, expenses, and profits and losses. When the time comes to apply for loans from the SBA or your local bank, you will need professional financial statements that show your profit and loss.
Great Software For Small Businesses
For a few hundred dollars, you can purchase Quick Books or Sage, which are easy to use and accepted by the IRS as official documentation. These programs give you the ability to enter receivables and payables, plus run all types of reports to show your progress. Coupled with your business plan, a P&L statement from QuickBooks is something you can take to the bank. QuickBooks even has an online plan for less than $35 a month, which is more basic than the full software, but still has what many small businesses need.
In the home improvement field, there is also industry-specific software such as Goldenseal Home Improvement. This product has accounting functions, project management tools, construction estimates, and contact management. Additionally, the software includes estimating features based on over 2,000 cost units, Goldenseal is comprehensive but rather costly for new businesses.
Free Or Low-Cost Options
In contrast to more costly business software packages, there are several free software programs that can do the job. One of the best is GnuCash, which offers double-entry accounting, the ability to do reports and graphs, stock tracking, and much more. This software is open-source and available on popular operating systems such as Windows, Mac, and Linux, and even Android. The product is regularly updated and since the interface looks very much like Microsoft Excel, the average non-accountant can take to it easily.
Aside from GnuCash, there are several other programs that are free or low-cost, such as Outright, EZAct, Fresh Books, and Free Accounting. Some of these have modules you can add to your basic system as you grow. Microsoft offers templates that are user-friendly too.
Whether you decide to place your bookkeeping and accounting solely in the hands of professionals, use your accountant as a consultant, or manage your books with software depends on your resources and your level of comfort in handling financial matters.
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