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Small-Business Accounting: Can You Do It All?

Small-business heirs have a ton of worries: How can I grow my company? Will I meet my sales goal this month? Did I keep my expenses under control?

The last hassles that these small-business owners have to worry about are payroll, bookkeeping, and taxes. Yes, these three jobs are super necessary. Even so, striving to do everything — even your accounting work — can rapidly backfire. Unless you exactly know what you’re doing, blunders that you make in these three fields could cost you considerably.

Based on my personal experience, here’s what I suggest that you do to accomplish these small-business accounting needs:

Do You Exactly Know What You Are Doing With Small-Business Accounting?

The first thing you have to develop is whether or not you fully understand what you are doing. Are you familiar double-entry accounting is?  Can you differentiate between credit and debit?

*If those terms sound like a strange language to you, you presumably shouldn’t be doing your own bookkeeping.

Are you aware of the fact that businesses match the employee’s FICA money for payroll taxes? Do you know you have to pay the federal and state income tax kept from paychecks to the proper areas? If these revelations astound you, you shouldn’t be doing your payroll.

Do you know if your business is a flow-through thing or if it’s assessed as a corporation? Do you know that most people in business need to give off quarterly tax payments to avoid extra penalties? If these things still don’t ring a bell, you shouldn’t be doing your taxes.

That said, just because you don’t know these things today doesn’t mean you should never do your own small-business accounting down the road. It just means that you shouldn’t do them right now. Here’s what you should do instead:

No Clue What You’re Doing, But Want to Do It Yourself?

Majority of small-business owners don’t really have an accounting background, so it is tough to know what you are doing. So if you aspire to do small-business accounting yourself, don’t just dive in the deep end. Alternatively, hire somebody to take care of these things in the beginning while you gradually learn how to do it yourself.

Income taxes and payroll are of a whole new story. You can customarily learn payroll by taking training from somebody who’s well-versed in your business and locality’s payroll problems.

On the other hand, small-business taxes are exceptionally complex. Besides, you don’t really do them frequently enough to even bother learning in many instances.

So, it is a smart idea to get help from self-guided software and hire some pros to handle taxes.

Using Software or Hiring the Experts for Your Small-Business Accounting Needs

Once you know bookkeeping, you’ll presumably want to utilize a software solution to manage your small-business accounting requirements. For instance, QuickBooks is one of the more common software options. It has a long history of offering a solid product. Even so, quite a lot of the people still get disappointed with it, just as they would any other software.

Before you understand what you are doing, I recommend either hiring a part-time bookkeeper or bringing in certified public accounting (CPA) firm who can keep your books for you.

Income taxes, meanwhile, are incredibly complex, to start with. They get even more difficult when you start bartering with businesses. If you’re confident and have a good knowledge of income taxes, you can try to use software like TurboTax to make your returns.

However, I highly suggest hiring a professional to do your taxes for you. CPAs are the high standard, but there are lots of other income tax training options out there, too. These people are aware of tax law and can sometimes help you save a great amount of money. They may even work with you throughout the year to organize business events in the most tax-friendly ways possible.

The Bottom Line

The idea of making a small-business bookkeeping, payroll, and taxes on your own can be very overwhelming. If you don’t understand what you are doing, begin by hiring the experts. Then you actively learn how to perform these tasks if you wish to take them over. Once you understand what you’re doing, use accounting software like QuickBooks, payroll services like Paychex, and tax software like TurboTax to make your life easier.

Alma Reed is an author and researcher dedicated to enhancing productivity. He is deeply interested in areas like time management, increasing productivity, and fostering healthy routines. Through his writing, he aims to assist people in boosting their job performance and attaining an ideal balance between work and life.

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