If you are a small business owner, especially in this wobbly global economy, you have your work cut out. You have to ensure you apply for and get all the necessary insurances and licences relevant to your line of business. You may need to negotiate a favourable commercial lease, open a business bank account, purchase stock and equipment etc. This is before you even get your first customer! But you can help yourself to save on your costs by becoming your own bookkeeper and using a small business bookkeeping package.
Yes, the requirements above (and more) should keep you awake every night once you join the small business galaxy. But wait, there's more news to add to your headache: according to various studies your new company will not necessarily succeed. No, that's not meant to cast aspersions on your entrepreneurial abilities. In fact, you deserve an Oscar for establishing your own business in an environment where even those currently in employment (traditionally the 'safer' jobs) are worried about the threat of redundancy. When you are in charge of the company, therefore, it is even more important to keep good business accounts at all times. Then you will know what is going on in the firm. You will be in the best position to manage the flow of cash around the business to the best effect.
Accounting software is a cost-effective solution for how to manage your small business records, especially if you can neither afford to hire an accountant nor pay a bookkeeper. In fact you will be at a positive advantage if you take on doing the books yourself. It's understandable if you are initially uncomfortable with the idea of software doing your bookkeeping. Computer phobia combined with the fear of numbers means that many end up keeping complicated and bulky paper records. Also, we are used to seeing 'suits' do our accounts. We are used to paying them handsomely for their number crunching abilities. But this is 2012, and technology has come to make the life of a small business owner like you easier, particularly your financial life. Some software packages are so easy to use that once you have got up and running you will wonder why you didn't start years ago.
Basically, small business bookkeeping software should enable you to record all the transactions that come in to and go out of your company, and deliver your net worth. You should be able to see if your business owes any cash to creditors. You will need to be on top of what you are owed too, by any debtors. You may need to record the pay details for your employees, or your own drawings. Once you have added in all the data you should be able to get a trial balance which will then enable you to generate profit and loss statements as and when.
An overlooked advantage of keeping good business accounts, apart from complying with your legal responsibilities, is that should you either opt for a bank loan for expansion or sell your business to venture capitalists in future, they will demand to see the books. Furthermore, you don't need to be a geek like Bill Gates. As long as you are computer literate (or are willing to learn!) and keep items like receipts and update your data every day or at least once a week (and make backups of course) you will manage.
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