An essential component of any business is bookkeeping. According to WiseGEEK (2012), book keeping is the process of maintaining the company’s books or records in an accurate and current state. This enables the business to monitor daily operating revenues and costs. Although it takes a lot of time, bookkeeping is the most crucial aspect of a business (WiseGEEK, 2012). The Peg-board system is one type of book keeping. This system consists of a board made of metal or wood with pegs down the left side, along with the necessary paperwork for running the company (Kinn’s 2007, p. 406). There are encounter forms, receipt forms, and more additional content.
The formula Assets = Liabilities + Proprietorship (Capital) (Kinn’s, 2007, p. 457) serves as the foundation for this entry system. Both sides of this equation must be equal. For instance, let’s say the doctor wants to spend $100,000 on a building. He or she has put down $35,000 and still owes the remaining $65,000. So, we’ll now enter this into the formula. $100,000 in assets equals $65,000 in debt plus $35,000 in capital. Together, they are worth $100,000 on each side. As the payments are made, this equation is altered. Every time a payment is made, the capital increases while the liability decreases, keeping the numbers on both sides equal. Any of the three would, in my opinion, be good bookkeeping systems. However, if the business is a rather larger one I would go with the double This is the one I would pick because it has more thorough business records and can be computerised. Additionally, it would keep all necessary figures in order and, if computerised, could perform addition and subtraction on your behalf. The system administrator would only need to enter the information accurately. I would use the peg board system if the company is small. This is a fantastic way to easily and effectively maintain order in the company.
Who Are the Bookkeepers?
A bookkeeper is someone who looks after a company’s finances.
To assist businesses with payroll, profit and loss statements, balance sheets, and other crucial reports, bookkeepers frequently use business accounting software.
Recording debits and credits, producing financial reports, entering data into spreadsheets and book keeping software, giving financial records to a CPA for tax purposes, handling bank reconciliations, maintaining budgets, managing payroll, and pointing out any inconsistencies or potential financial problems are just a few of the typical tasks of a bookkeeper.
An accountant is distinct from a bookkeeper. Bookkeepers are not required to have an accounting degree to perform their duties, nor can they file taxes or conduct audits. (You are correct—you do not require a college degree. Anyone can be successful as long as they have the necessary skills.
Overall, bookkeeping is easier to understand than accounting and primarily involves monitoring the money used in daily transactions.
3 Motivators for Launching a Bookkeeping Business
Do you think bookkeeping sounds like a career path you might be interested in now that you are aware of what it is?
Even though starting your own business may sound like a good fit, it is intimidating.
But it’s not necessary to be!
One of the less intimidating business ventures is book keeping, and starting your own bookkeeping firm makes sense for a number of reasons.
Let’s investigate them:
- You can launch it with a modest budget
- You don’t require a particular degree
- Accounting is adaptable
1. You can Launch It on a Tight Budget.
The majority of small businesses have high startup costs, including those for renting or purchasing a building, stock purchases, and supply purchases.
In contrast, it’s simple to launch a bookkeeping business. If you already own a computer, it will only cost you a small amount of money to get the required software, learn how to use it, and start providing bookkeeping services from your house.
Later, when you have more clients, staff members, and perhaps an office space, you can always grow. However, bookkeeping gives you the opportunity to get started on a tight budget.
2. You Don’t Require A Particular Degree
Unlike some closely related fields of work, like accounting, becoming a bookkeeper doesn’t require a specific degree. Of course, it still takes time and money to become a capable and proficient bookkeeper. Additionally, getting certified is a good idea because it gives your company credibility even though it is optional.
However, bookkeeping, unlike many other professions, allows for self-education. It makes no difference how you learned something, whether you attended classes or watched how-to videos. It only matters that you are capable of carrying out the task well.
3. Bookkeeping Is Adaptable
You can choose how big or small you want your book keeping business to be.
It may be a small side business that you run from home on the side. Alternately, you could keep bringing in clients, hiring staff, and expanding your company until it is a respectably sized bookkeeping firm.
How to Learn Bookkeeping
Now that we’ve gone through all the steps to start a bookkeeping business, let’s talk about how to learn bookkeeping.
Unlike accounting, there’s no degree necessary for becoming a bookkeeper. You just have to know what you’re doing and do it well.
After working with hundreds of bookkeepers we have created a list of the best free and paid bookkeeping courses online that you can start with.
Next, you will want to choose a bookkeeping software and learn how to use it properly.
Most bookkeepers use Quickbooks Online—the accountant version. The second-most popular software option for bookkeepers is Xero.
Do some research to decide which option better suits your needs, and then commit to learning how to use that program inside and out.
Although, there are plenty of online resources and classes that teach bookkeeping, the best way to learn the program is to get certified through the company itself. (Both QuickBooks and Xero offer certification options.) You may also consider becoming a certified public bookkeeper.
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