Bookkeeping is important to a business as we can use it for predicting cash flow, predicting taxes, and to see the financial state of a company. You can hire an accountant to do this for you, or you can buy a computer program suited for your needs.
The absolute basics that need to be tracked are profit, income, and expenditures. The following is a basic list of things involved with accounting for a business:
- Payroll Records
- Bill Statements
- Bank and credit card statements
- Tax forms and returns
Accountant VS Program
An accountant is an actual person with real training and abilities beyond a bunch of help files. They can work closer with you to manage your company. Professionals (CGAs, CTAs, CMA, etc) can spot problems early, offer advice, and help prepare for an audit. Software can do none of this. The downside is they cost more. There will be a consulting fee or an agreed upon contract for services rendered.
Most of the computer programs on the market, like QuickBooks, FreshBooks, and Xero are easy to use and affordable to purchase. Many offer Cloud based services so your records are accessible through any internet capable device. Your financial data, including any reports you generate, are available 24hrs a day for free. There are several free software packages available for free that seem adequate enough to get the job done for a small business.
There is a lot of benefit to using both human accountants and software for your business’ success. Relying on computers for everyday activities like payables, income statements, and recording a detailed transaction ledger are great, but will not replace human interaction. Accountants can offer detailed knowledge where the computer cannot.