A Guide to Small Business Bookkeeping

Bookkeeping is a critical operation for businesses. It serves as an overview that helps you understand your income and expenses and presents a broader picture of the financial health of your business. Most business owners undertake small business bookkeeping exercise themselves. In a way, it is a healthy practice as it helps a business owner get a clear picture of the money that is earned and take financial decisions with more clarity on the outcomes.

However, as a business grows, a business owner’s attention is required on several other functions. If you are based in Toronto, the best step at this juncture for you would be to outsource these functions to a reliable and reputable accounting firm that provides bookkeeping services in Toronto.

If you are a small business owner, here is everything you need to know about small business bookkeeping:

What is Bookkeeping?

Bookkeeping is the term used for daily recording and management of day-to-day monetary transactions of a business. Over a period of time, bookkeeping helps a business owner get a bird’s eye view of the financial transactions since the establishment of the business.

For small businesses, bookkeeping services in Toronto is done under the following headers:

a. Sales Earned Revenue
b. Payment of Taxes
c. Earned Interest
d. Payroll
e. Loans and Investments
f. Other Operational Expenses

An accountant will record all transactions and attach supporting documents such as a receipt, purchase order and invoices.

While accounting and small business bookkeeping may appear to be synonymous to you at this point, there is a clear distinction between the two. Bookkeeping involves recording financial transactions and accounting involves analyzing and interpreting financial data, alongside recording it.

Why Do Small Businesses Need Bookkeeping?

Is bookkeeping a necessity for small businesses and can hiring a firm for bookkeeping in Toronto help? Yes! They are critical for small businesses because they not only provide a broad perspective of the financial health of a business, but also play a critical role in helping business owners make responsible and profitable decision for the growth of their business.

a. Supports Accurate Budgeting

Having all transactional records in one place can help you get a better view of the direction in which you want to grow your business. Hiring bookkeeping services in Toronto will ensure that all your data is always handy. This way you can interpret, analyse and then take more accurate and successful business decisions. Without bookkeeping, budgeting will only be guesswork where you will struggle to take the right decisions.

b. Managing Taxes

Filing taxes is an arduous task. However, if you have been dutiful about bookkeeping, you will not have to struggle while calculating your taxes. You can go through your records, calculate the taxes and save yourself the hassle of hunting down documents for the taxman. If you are struggling with regularly updating your records, it is time for you to get help for bookkeeping in Toronto.

c. Records Remain Organised

Bookkeeping helps you record your growth curve. As a business grows, it generates multiple transactional data which needs to be recorded regularly and accurately. Bookkeeping can help you keep this data organised, ready for reference whenever you need it.

d. Set Clear Business Goals

If you are keen to grow your business, then it is critical that you draw up a clear roadmap. The best and most effective way to set goals and draw up a roadmap is to use insights from bookkeeping data. Once you analyse the data, you will have a clear understanding of which aspects of your business are doing well and have potential to spur your business growth.

e. Comply with Government Regulations

One of the biggest advantages that bookkeeping offers is that it keeps your data ready. Government regulations are dynamic and subject to change. To comply with these changes, you will be asked to furnish data of your past transactions. If you have been regular and sincere with bookkeeping, complying with government regulations would be a cake walk for you. Also, you will also learn to digitise your bookkeeping exercise and learn to use accounting software too.

Besides all these aspects, the most important benefit is that bookkeeping gives you peace of mind. If your bookkeeping is regular and organised, you will be alert about deadlines, avoid penalties and – above all – avoid stress.

If you are looking for a trustworthy firm that can provide bookkeeping services in Toronto, reach out to Apex Accounting – the most trusted name for all kinds of accounting and bookkeeping services!

Connect with Us for the Best Bookkeeping Services

Apex Accounting offers a host of services, along with small business bookkeeping for businesses. Apex will not only maintain your books but also help you understand them to help you to make the right financial decisions at the right time. With Apex Accounting, you have the foremost assurance that qualified professionals are managing your financial needs. We use the most sophisticated accounting software available on the market today to give you confidence that your financial reports are accurate and error free. Reach out to us at (647) 979 – 7728 or write to us at info@apexaccounting.ca.