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How do SMEs do their Bookkeeping?

No matter how large or small or which country your business resides in, bookkeeping is the process that tracks the financial health of your company.

Bookkeeping is essential for every business.

No matter how large or small or which country your business resides in, bookkeeping is the process that tracks the financial health of your company.

As your company grows, your books usually become more complex and the pressure increases for the owner to maintain a good cadence of frequent bookkeeping. The accuracy of your financial information is pertinent to how you make informed business decisions. Making business decisions based on inaccurate financial data can lead to the demise of your company, but this can be prevented if there is good bookkeeping hygeine.

Having accurate books is also essential if you are seeking for a bank loan, or you wish to raise a seed round for your startup, any potential stakeholder whether it is a bank or investor would want to have an accurate view of your financial data.

There are several ways for startups and SMEs to do their bookkeeping. It depends on the size of the company, the nature of business and the budget allocated to this function.

1. Doing It Yourself

There’s nothing wrong with taking on tasks related to your business on your own.

If you have a small business, you know it as intimately as anyone else does. While for some it’s a control issue to take care of things on their own, for others, it’s a necessity.

If you’ve been on top of everything related to your business, DIY could be one of the ideal bookkeeping solutions compared to hiring a third party. As long as you’ve got all of your invoices saved and you’ve been dutifully putting them into your accounting software, this could be a breeze.

If you’re the type who learns quickly, you’ll be able to get a strong understanding of how the financial side of your business is operating. You might spend more of your days working on products, inventory, and marketing.

Handling your own finances isn’t without its downsides in the realm of bookkeeping solutions. While you’re worried about building spreadsheets and tracking expenses, you could have work piling up regarding your business.

You could also end up spending an arm and a leg on bookkeeping software and tutorials. Calculate the real costs of your time and expenditures. Hiring someone might be cheaper.

2. Hire A Permanent Bookkeeper

Once you start making enough money to hire a staff, you might start thinking about hiring an on-site bookkeeper. Even if you’re a non-traditional company selling non-traditional products, the standard practices could help make sure you have the room to innovate.

This way, you’ll get a well-trained professional who you can count on for all of your budgetary needs.

You won’t have to keep tracking down every financial record, expenditure, and transaction while you’re managing everything else. Also, once you start growing your staff, you can start spreading work around more evenly and improve morale in your office.

A well-managed team can help to support each other and to facilitate growth. With a shared set of skills around, you’ll find that you’ll be able to tackle problems better than you could on your own.

You need to make sure you’re ready to train and manage your bookkeeper. If you just let them freestyle in your books, you might be surprised with what you get at the end of the year.

Even a well-trained and experienced bookkeeper will have their own style. Make sure your goals are clear to them before they begin.

One major downside of hiring a in-house bookkeeper is obviously the cost. There are more cost effective alternatives such as outsourcing your bookkeeper. Each option has their pros and cons.

3. Cloud Accounting Software

You could manage your accounting and bookkeeping on your own in a new way. Rather than the classic way of writing things down or building spreadsheets, cloud accounting can integrate all of the payment systems you work with. The leading accounting software out there are Xero and Quikbooks.

If you receive payments through various accounts or payment services, you spend half your day trying to get the money clients have sent to you. Without smart bookkeeping solutions, keeping track of all the invoices could be another headache.

While you’ll still need to take some time to learn the software and get acquainted with this kind of accounting, it’s usually cheaper than hiring staff. You’ll also have access to support channels and tutorials that could help you manage payments.

The downside is that you won’t get the kinds of advice and tax support that you’d get with full-time staff. You’ll also have to keep thinking about how much time you’re devoting to working with this software.

Even though this new type of accounting software is marketed towards everyday business owners, it can still be quite complex to use and adapt towards. We think you should leave this to the experts so you can focus on your business.

4. Outsourcing Bookkeeping

As wonderful as it would be if QuickBooks just generated perfectly accurate, understandable books each month, it doesn’t. Bookkeeping software exists to be used by someone, and if you want that process to be automated, you’ll need the help of computers and humans.

There’s been a wild surge in outsourcing used by small businesses in the last few years. Outsourcing your bookkeeping could allow you to take advantage of the positive aspects of cloud accounting without having to handle everything on your own.

Think about it: Bookkeeping essentially tracks and elaborates on how money has moved into and out of your business. To figure out what happened each month, you have to look at a number of data sources (your bank statement, your payroll statement, your credit card statement, the invoices you’ve sent, etc.). How you record that information is fairly standard and lends itself well to smart automation.

But other parts of bookkeeping — such as making sense of that data, handling unexpected use cases, and explaining everything — are better done by experienced, human bookkeepers. That’s the premise behind why Binery even exist.

We give computers the tasks that computers do best while leaving the rest in the capable hands of our bookkeepers. Computers take care of all the simple, error-prone, repetitive bookkeeping tasks, while our bookkeepers have more time to spend directly on client questions and concerns (and not on manual data entry).

In short, we employ expert bookkeepers and empower them with software automation. They track everything in QuickBooks Online so you’ll have easily accessible, readily transferable, and accurate data, all on a platform that integrates well with other awesome financial tools.

Whether you’re preparing for your next round of funding or trying to build next year’s budget, you’ll always have the information you need in a simple, easy-to-access format. We provide monthly, quarterly, and yearly financial statements such as balance sheets, P&L, and cash flow. And if you want to know something specific, your dedicated bookkeeper will be able to provide that information anytime.

Choosing What Is Right For You

Choosing the right solution for your bookkeeping needs is essential to keeping your business going.

If your business grows at the pace where you’re making any profit at all, your bookkeeping could quickly grow out of control. Make sure whoever you hire to manage your business gets to know how your business runs and feels comfortable giving you feedback.

If you head in the wrong direction, your bookkeeper could save you from a nasty tumble.

We think you should give Binery a shot and get leverage on all the advantages a bookkeeping partner using technology can offer.

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