Bookkeeping Basics for Small Businesses

Bookkeeping Services in Houston

Bookkeeping is a core part of business finances and can impact the growth and success of your small business. It can encompass a variety of tasks — from basic data entry in a software platform to working with certified public accountants — and is the backbone of your accounting and financial systems.

Bookkeeping basics 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.

Setting up accounting software

Setting up bookkeeping or accounting software includes connecting business bank accounts, doing any necessary data entry and reconciling transactions. It also involves checking for errors, learning about your specific software and looking for ways to streamline different parts of your accounting processes.

Choosing an entry system

Small-business bookkeeping requires you to choose between single- or double-entry accounting.

• Single-entry accounting records all of your transactions once, either as an expense or an income. This method is straightforward and suitable for smaller businesses that don’t have significant inventory or equipment involved in their finances.
• 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.

Choosing an accounting method

You’ll also choose between cash- or accrual-based accounting.

Cash-based accounting records transactions when money changes hands. This method doesn't record invoices or your company's outstanding bills until they've actually been paid.

Accrual-based accounting records those invoices and bills even if the funds haven’t been exchanged. Generally, accrual-based is the recommended accounting method, but the decision is ultimately up to you.

Managing transactions

Managing transactions is a day-to-day part of bookkeeping. This includes importing and categorizing transactions properly, reconciling these transactions and making sure they’re recorded according to your entry system and accounting method.

Handling accounts receivable and payable

Small businesses also handle aspects of accounts receivable, which ensures your business is paid for its goods or services. This can include estimating the eventual value of a finished project, preparing and sending invoices and providing statements.

Small-business bookkeeping also includes ensuring your business pays bills and invoices on time, which is known as accounts payable.

Setting up payroll

Some businesses process payroll within their accounting software; others will have a separate payroll software. How you set up and manage payroll will depend on which software you choose.

Coordinating with a tax specialist

A small business needs to identify potential deductions and make tax procedures as seamless as possible. Some accounting software options can connect you with tax specialists. If you don't connect with one through a service or software, you'll likely want to work with one when it comes to filing business taxes.

Managing financial statements and documents

Bookkeeping for small businesses also includes managing important accounting documents and maintaining the information — transactions, assets, income, expenses, etc. — that are used for financial statements. Many software options allow you to store documents and streamline the documentation process as you go.

Source: nerdwallet

Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.

Bookkeeping Services in Houston

Certified Public Accountant in Houston, Alfredo Gaxiola CPA in Houston, Certified QuickBooks Proadvisor in Houston, QuickBooks Set Up and Training in Houston, Business Tax Return in Houston, Personal Tax Returns in Houston, Quarterly & Monthly Filings in Houston, Financial Statement Preparation in Houston, Consulting Services in Houston, Payroll Preparation in Houston, Bookkeeping Services in Houston, Bank Financing in Houston, IRS representation in Houston, Business Planning in Houston, Personal Finance in Houston, Income in Houston