One of the most important aspects of any business is accounting, after all businesses exist to make money and accounting records and gives feedback on that money and how well, or otherwise, the business is doing. As a home-based business owner though accounting can be quite a daunting part if you have never been in this field before.
What Accounting Package Should I Use as a Home-Based Business Owner?
There are a number of different accounting packages out there and you will need to decide which one is right for you. In general though we would recommend a cloud accounting package because it is generally easy to use and also allows far better communication between you and your accountant as they will also have information immediately available to them.
Can I Do My Own Bookkeeping or Should I Hire a Professional Bookkeeper?
Many small businesses, especially home-based, choose to do their own bookkeeping instead of hiring a professional but this is up to you. Some people simply hate capturing books, whereas others see the benefit in the money saved. If you do decide to do your books and have no previous experience then it is best to get your accountants assistance in setting up the books and let them give you some basic lessons on how to capture and what is required.
What Should I Keep for Accounting Purposes?
It is best to keep all bills and invoices related to business for a period of at least five years. This may vary from country to country so be sure to check the requirements for your area. Slips for personal use don’t generally need to be kept but business ones do, especially those for larger amounts.
Your Filing System
In order to keep your records properly it is best to have a good filing system. How you set up this filing system is up to you but the main requirement is that you can find things quickly and easily. If you are ever under audit you will want to have this information at your fingertips and not have to spend hours searching for something.
Bookkeeping for the home-based business needn’t be complicated and it is important to find systems that work for you and that you can stick to. Having information readily available is the major requirement and some basic accounting will be able to give you some useful information regarding the state of your business at any point in time.