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“I’m a new business owner, do I need to do bookkeeping?”

Business people, telephone, conversation, communicationNew Business Owner: "I'm a new business owner, do I need to do bookkeeping?"

Abacus Bookkeeping: "Yes!"

New Business Owner: "But why? I don't have that many receipts at the moment and my income is really low."

Abacus Bookkeeping: "Do you have to file a tax return at the end of the year?"

New Business Owner: "Well, yes, everyone does."

Abacus Bookkeeping: "Then you need to do your bookkeeping throughout the year so that you can file your taxes. By doing your bookkeeping each month it will make sure your capture all your business expenses and income and it will make it easier to do your tax return at the end of the year. Not only that though, you need to know if you are making a profit or a loss each month."

New Business Owner: "OK, but I don't know how to do bookkeeping."

Abacus Bookkeeping: "That's OK. When you start out with a few receipts and invoices you can easily keep track using a spreadsheet and a file box to store everything."

New Business Owner: "How do I set up a spreadsheet to do that? What do I need to have on it?"

Abacus Bookkeeping: "You need to have your invoices, or your income, listed first and then your expenses listed below. Total the income and total the expenses. Then deduct the expenses from your income and that will tell you whether you are making a profit or a loss. Just use a new column for each month and you can see how your business is doing month to month"

New business owner: "OK, that makes sense, I think I can do that. What is this file box that you mentioned?"

Abacus Bookkeeping: "It's a real simple way to organize your invoices and receipts so that you have everything filed in one place. Get some suspension files for the file box and put the tabs on the top labeled for your difference expense categories. For example, postage, telephone, advertising, etc. Remember to create one for incomes as well! Then as you get a receipt or invoice put it into the correct file. At the end of the month you can then enter them to your spreadsheet. Once they are entered, put them into an envelope and label it the month that they relate to, e.g.. June 2014."

New Business Owner: "Great, I can do that. Thanks! What about as my business grows though and I get busier? I won't have time to do the bookkeeping. What do I do then?"

Abacus Bookkeeping: "That's the time to give me a call! It's important that you recognize when that time comes so that your focus stays on growing the business and taking care of your clients. We will take a look at to the volume of receipts and invoices that you have and we will set you up on a package that meets your needs and I will take of the bookkeeping for you so that you can focus on your business. How does that sound?"

New Business Owner: "That sounds great! Phew, I feel much better now. Thanks for explaining this. Bookkeeping isn't as scary as I thought!!"

Abacus Bookkeeping: "You are so welcome! You did the best thing for your business by recognizing that the bookkeeping is an important part of your business from day one. You need to know whether you are making a profit or a loss. Good luck with your business!"

This could be a typical conversation that could happen when a person starts a new business. By spending a few minutes chatting to a Professional Bookkeeper you can find out what you need to do and they will help you get started. 

What questions do you need to ask today about setting up your bookkeeping system for your business? Would love to see your questions below! 

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