Accounting for Small Businesses: A Comprehensive Guide to Financial Management

Your business should implement efficient record-keeping policies and a sound financial strategy to avoid this situation. Start by learning all about how to open a business bank account, then check out our top recs for business checking and business savings accounts to find the right account for you. Consulting part-time with a small-business bookkeeper or accountant can work nicely for newer, smaller businesses. But once your business is big enough that you can’t (or simply don’t want to) wrangle finances by yourself, it’s probably time to get a bookkeeper or CPA on your payroll. Small-business accountants range in price, depending on a number of factors.

Outsourcing Accounting Services for Small Businesses

ZarMoney earns a 4.7-star rating on Capterra with 83 user reviews and a 4.8-star rating out of 24 user reviews on G2. Users say the software is easy to use and that customer service is responsive, knowledgeable and caring. However, they also say that accessing the software on mobile devices is extremely difficult and navigating the software menu can be confusing at times.

Best for Comprehensive Features

Financing activities include generating and spending cash to fund the company, such as paying cash dividends to shareholders, receiving cash from issuing stock, and receiving cash from paying down debt. Try Shopify for free, and explore all the tools you need to start, run, and grow your business. You might have an unexpected downturn in sales due to uncontrollable external circumstances, or maybe you need a financial boost during slow periods in a seasonal business.

Is accounting software secure?

It also offers strong budgeting functionality to assist with financial planning. All of these features combined make NetSuite a very capable option for businesses of a suitable size. That said, it’s not a trivial investment and implementation does require specialized expertise to configure it optimally for each unique client situation. Costs can really add up off balance sheet both upfront and ongoing, so it’s important any prospective user has a completely validated needs case first before committing. The software even allows a breakdown of tracked time based on billable and non-billable activities within each project or job.

1. For example, a company with $10,000 in assets and $2,000 in liabilities would have an $8,000 shareholders’ equity.
2. However, the dashboard offers some convenience features that make the user experience intuitive.
3. Accounting software is a computer program that helps businesses track income and expenses.
4. In addition to offering accounting features, ZarMoney offers a robust cloud-based inventory management solution.
5. Once the adjusting entries are made, an adjusted trial balance must be prepared.
6. The best bookkeeping software syncs with your business bank account and payroll systems so that you’re easily able to import and export transaction history.

A payroll service provider can do all this to save you time and ensure accuracy at a reasonable cost. Unless you have a very small volume of transactions, it’s better to organize separate files for assorted receipts weekly or as they come in. Most accounting software lets you scan paper receipts and avoid physical files altogether. Payroll involves the examples of key journal entries payouts to a business’s employees, including benefits, salaries, taxes, garnishments, and other deductions.

She is passionate about helping them navigate some of life’s most difficult issues—divorce, death, career changes, caring for aging relatives—so they can feel confident and in control of their finances. She takes pride in her ability to make a difference in people’s lives. Rita also volunteers her time as a SoleMate, or charity runner for Girls on the Run, raising money for scholarships for girls. She is a regular columnist for Kiplinger & US News & World Report, and a past spokesperson for the AARP Financial Freedom Campaign. In 2023, she was named the No. 2 Most Influential Financial Advisor in the Investopedia Top 100. Today’s leading accounting platforms offer standard security features such as data encryption, secure credential tokenization and more.

Do you need a business credit card?

Effectively managing your small business’s finances goes beyond bookkeeping. Using professional accounting methods allows you to properly strategize for your company’s future and meet your legal requirements. Income statements, often referred to as profit and loss statements, summarize a small business’s revenues and expenses over a specific period. Assets have economic value and can reduce expenses and improve sales. Examples of assets include real estate, inventory, cash, and accounts receivable. Balance sheets list assets in order of liquidity — how easily they can be sold, consumed, or turned into cash.

Accounting helps a business understand its financial position to be able to make informed decisions and manage risks. Your answers to the questions above will help you decide on the most sensible options for your small business. Then, you what is a trial balance report can get back to doing what you love with confidence in your financial future.