Bookkeeping software was designed to make it simple for small business owners to do their own bookkeeping. But many owners don’t have the time or desire to do that, and that’s where you can step in and provide a ton of value for them (and be well compensated in return). Bookkeeping, as it bookkeeping turns out, is one of the best online businesses you can start. For every new small business, it might not make sense to hire a bookkeeper straight away. But as soon as you see growth in your company, it will soon be essential to have a highly detailed, consistent bookkeeping approach.

You can opt to connect a single sales channel or choose one of the multi-channel pricing plans to get a bulk discount. With Xero, you can easily track your sales, send invoices and manage your suppliers’ bills, all within the same software. And with pricing plans starting at just $15 a month, it’s attainable for small businesses on a budget. Bookkeeping focuses on recording and organizing financial data, including tasks such as invoicing, billing, payroll and reconciling transactions. Accounting is the interpretation and presentation of that financial data, including aspects such as tax returns, auditing and analyzing performance.

Set up budgets

Bookkeeping involves recording and organizing financial transactions like income and expenses, accounts payable and receivable and bank reconciliations. It’s a critical part of any business, and many small business owners struggle to keep up with it on their own. Unlike certified public accountants, bookkeepers don’t file tax returns or audit financial statements. Unless they are a chartered certified accounant, bookkeepers should not prepare or sign tax returns.

• She is a former Google Tech Entrepreneur and holds an MSc in international marketing from Edinburgh Napier University.
• You may find yourself working closely with their tax preparer, and together, you can provide outstanding service to your mutual clients.
• A bookkeeper’s work is applicable across many different types of industries — after all, every business needs to track and optimize its finances.
• You can either keep hard copies or opt for electronic files by scanning paperwork.
• Look at the item in question and determine what account it belongs to.
• Establishing a strong online presence is crucial for reaching a wider audience and attracting potential clients in today’s digital landscape.

Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications. Getting a unique phone number for your business is incredibly easy and often free.

Invoice and bill management

Many accounting software cap the number of invoices you can create or the bills you can track on the cheaper entry-level plans, so bear that in mind. Wave does not directly integrate with any e-commerce platforms, but you can still connect them using Zapier. Start by deciding on the system you want to use, whether it’s an online program, paid software or a spreadsheet. Next, set aside a dedicated time either weekly or biweekly to review your bookkeeping, reconcile transactions and complete necessary data entry. Finally, you’ll want to decide how all receipts and documents will be stored. You can either keep hard copies or opt for electronic files by scanning paperwork.

While bookkeeping provides oversight into each individual transaction (in order to catch discrepancies and correct mistakes), accounting provides a thorough analysis of these numbers. Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. A bookkeeper’s work is applicable across many different types of industries — after all, every business needs to track and optimize its finances. However, to help market your business and set it apart amongst the competition, you may decide to specialize in a specific industry.

Accounting software

If you’re successful at building your business and attracting high-quality clients, you could easily charge more. Although you’ll hear about accounting software like Quickbooks and Sage the most, there are also a few programs designed for more niche uses. Sage One is another piece of software that bookkeepers should be aware of. It’s slightly different from QuickBooks and Xero since Sage excels in its project management and invoicing features and but has a more basic approach to bookkeeping. As mentioned previously, Quickbooks is the biggest and most popular software used by bookkeepers and businesses.

The flexibility to work while continuing to study for her CPA exams was appealing. Barnes also liked the idea of having the chance to network and explore contributions she could make in different kinds of roles. While the share of accounting majors on the platform has ticked up recently after several years of declines, experts say this won’t be enough to solve a worsening shortage. For more information, read the full Wave accounting review and check out our list of Wave accounting competitors. If your bookkeeper bills your customers or pays your vendors and employees, make sure you have proper checks and balances in place to mitigate the possibility of fraud. At the end of the day, our readers come first and your trust is very important to us.