Question 1

Can I do my own Small Business Accounting?

Accepted Answer

Yes. There is no legal requirement for a small business to use accredited accountants or professionals to handle their accounts. As long as you accurately report your business finances and handle your taxes, you can do all of your own accounting.

Question 2

What Small Business Accounting is Essential?

Accepted Answer

Essential small business accounting can be broken into two categories: accounts that are essential for business health, maintenance, and growth, and accounts that are required by law.

Essential accounts for your business’s health, maintenance and growth include basic bookkeeping and annual reports or accounts. Legally, the only accounts that are essential are your annual tax returns. Larger businesses have more requirement imposed on them, so make sure you know the size of your business, your annual income and profits, and if your tax bracket has changed. There is a chance you will need to prepare a cash flow statement along with other financial documents to be operating legally.

Question 3

How do Small Businesses Manage Accounts?

Accepted Answer

Most small businesses who have a good handle on their accounts have turned to software that helps them keep track of their finances. There is a lot of good software available with free, subscription, and once-off payment options to suit your needs and business. The software is often linked to your business account and you can handle most of your transactions in one place, simplifying your business finances.

If you would prefer to keep things simple, many elf-employed and freelance workers still use spreadsheets and find them sufficient for handling smaller business accounts.

Regardless of the size of your business or your preference for software, there are a few steps you should take to ensure you fully understand your accounts and are able to control them well:

Question 4

What Software is Best for Small Business Accounts?

Accepted Answer

There is so much software available to help small business, picking the best can be a daunting task. Although you will find plenty of lists with the best software, at the end of the day you need to decide exactly what your business needs and how much time and money you are able to invest in your software. More expensive packages may offer more features, but if you have a small business then you may not need the features and could end up paying for unnecessary extras.

Question 5

How Does a Small Business Create a Cash Flow Statement?

Accepted Answer

You will often have heard the saying “cash flow is king”. Understanding your cash flow is essential in understanding the success and stability of your business. A cash flow statement will only reflect activities dealing with actual cash exchange and will exclude all debts and credits. This gives you a good idea of your business’s risk management as well as general cash health.

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