“Balancing the books” is a wide often terms used at every step of our life. The term is no longer limited to the original sense from where it came from, bookkeeping. Instead, we see it being used as a form of threat. People might say the phrase and indicate that they will also have to pay since the enemy took away something. Well, let me tell you this is a false belief. And I am hear to explain the truth behind the importance of having the best bookkeeping tool in your tool belt.
That is, bringing balance to both sides. Mafias are seen using the term a lot while collecting their payments for providing security to the local businesses. Well, the mafias in the film originated from Italy, and it is more obvious of them to use the term.
If you have studied business as an education curriculum, you probably know who Luca Pacioli is. He was an Italian mathematician and collaborated with Leonardo da Vinci in some of the works. Better yet, he is widely known as the father of accounting. He introduced the double-entry bookkeeping system to the public. He gave it a proper structure and understanding, which was later accepted as the bookkeeping’s scientific way.
What is Bookkeeping?
Put merely, recording transactions in a book is bookkeeping. That is, maintaining a book that will give the full view of a company’s financial condition. Well, not actually financial; it is just limited to noting down. The summation, deduction, analysis, ratios, and balances are more complicated tasks. We will get back to them in the article later on. Remember, transactions aren’t limited to cash or cheque only! It can be depreciation, appreciation, investments, and even advance income or payment.
Double Entry Bookkeeping
Are you confused about how you are going to record the non-cash entries? What effect will it have on the books and cash? Also, should you count the expense incurred as salary payment as same as buying new types of machinery? How would you take advantage of pieces of machinery losing their value while giving taxes?
Yeah, all these and more such problems came to the merchants and bookkeepers in the early ages, as early as 70 AD. However, the modern state that answered all the questions and gave a standard structure, first came into being in the 13th century. Later on, in 1494, Luca Pacioli popularized it through his book.
The double entry system is based on the single formula, “Assets= Liabilities + Equity.” As per this method, every transaction has 2 effects on the accounting, one account is gaining, and at the same time, another is losing. It introduces the concept of debit and credit. Here, increasing of assets is debit while increasing of liabilities and equity is credit. Again, equity consists of income and expenses, and revenue will increase equity, making it credit.
Entrepreneurs as Bookkeepers
Is entrepreneurship all about glamour and hype? Do all entrepreneurs feel proud to have started their own venture, follow their idea, and give it a real shape? Are they really a step closer to solving a problem of our life and making it more convenient? Well, let me tell you this, without money, all the ideas, solutions, dreams mean nothing.
You need investments to start the project, lead the concept into a reality. Guess what? If you don’t keep track of how the money is moving around in the business, you have no grasp on the flow of money, you will become broke sooner than later.
Having your accounting sorted allows an entrepreneur to identify potential spaces to breathe and find viable solutions for both the business and the customer. You can also take advantage of the tax holidays by paying taxes and verifying your books on time.
A successful entrepreneur always maps out how they will collect funds and capital, how they are going to spend it, at what rate, and make contingency plans for the future. Remember, you will have many legal obligations to pay money, salary, interests, taxes, dividends, etc. If you do not oblige them, your business might get sued, and best case, you will end up selling assets, or worst-case scenario, you are jailed for not paying!
Even if you have unlimited funds, which is never true, you should still maintain books. If not for anything else, the books’ balance will let you know if you are really growing or if your business plan is not working according to your goals. Books can always be an eye-opener, be it record-keeping books!
Makes no Sense
Are all these accounting jargon and ideas, making no sense to you? You fully understand the importance of accounting and really want to maintain books in the double-entry system. Yet, you can’t get a grasp of it? It is usual for the hotshot entrepreneurs to be busy and finding no time to focus on side hassles!
Can you also not afford to hire a bookkeeper, let alone an accountant? Well, you are in luck! With computers and smartphones today, it is no wonder you can simply employ software to do all the hard works. The only one to use is Quickbooks!
What is Quickbooks?
Quickbooks is simply an accounting software. All the tasks that accountants had to do by writing pages after pages, updating multiple accounts across several books, crunching numbers on the calculators with eagle eyes, and making sure that the book matches, has no error, is now possible with some simple clicks. You need to enter the transaction details once. The software will finish the whole double entry system and bring out analyses for you.
Quickbooks was created by Intuit back in 1983! Since then, it was known as Quicken and was targeted for personal financial management. Aside from Quicken, only Peachtree Accounting existed in those early days. While Peachtree focused on large corporations, small businesses found their money’s worth in Quickbooks. After almost 40 years, the software is going strong, with 80% of the small companies using it.
Customer Friendly and Intuitive Interface
Quickbooks rejects the notion that small businesses need to learn hardcore accounting and know which should go where. Instead, they have made a friendly, intuitive user interface that tells you what and where you should enter the details.
You don’t need to either have accounting knowledge or technical one to use the software. Even if you get stuck, Intuit has made hundreds of tutorials to guide you. Quickbooks doesn’t stop there, if you think the videos aren’t enough, you can request a virtual orientation, and one of their members will guide you through the whole system.
Intuit went miles and beyond in ensuring that Quickbooks is equipped with all the features thinkable for a small business accounting software. They are continually updating the features and even rolling out new ones. Such proactiveness made them hard to catch for others. Besides recording, you can create invoices within the app and simply print or email them to the customers.
You do not need to purchase any invoice generator. After that, Quickbook is continually tracking your dues, both those you have to pay and receive. It will give reminders when the due date is close.
Intuit understands the pain of organizing and documenting receipts. Hence, the app has an in-built feature to scan receipts and store them aside from the transactions. You won’t even have to type in the amount; the app will read and put it in.
The app also generates financial statements like balance sheets, cash flows statements, and income or profit-loss reports automatically from the transaction you reported. You can view or print the reports out anytime you want.
Know your Mileage Details
This is such cool a feature that we had to give it a headline. So, you know how you can get a tax benefit if you can say precisely when and how much you traveled for specific business purposes? Well, Quickbooks uses the phone’s GPS to track your movements and record them so that you can claim such benefits!
The level of integrations and partnerships Quickbooks has made within the years is bound to surprise you. They have their own add-ons integration like live bookkeeping, payroll management, inventory management, and payments system. Besides that, you can also connect Quickbooks with other software through the 700+ plug-ins it has!
Integrated software includes other business software like 71lbs Shipping Refunds, activate inventory management software, AccuPOS point of sale, and so on! Just saying you don’t need the 3rd party plug-ins. The inventory, payments, and payroll add-ons by Intuit are enough for covering all operations.
Know your Taxes
Filing for tax returns, using an accountant’s help to prepare everything is a pretty hectic process! If you do not have everything organized, it will take time, and you may lose the tax holidays. Well, Quickbooks has everything organized for you. You can just print out the financial sheet and take it to the accountant. Upon that, if you have the TurboTax add-on, the app will send all the details through your tax return account, prepare the documents and file for the payment!
This is why small businesses love it so much! Affordable pricing with customizable features. Quickbooks has dynamic pricing across 3 categories. They have Quickbooks Desktop, Quickbooks Online, and Quickbooks self-employed. The self-employed class starts from as little as $15, while the desktop category with 40 users costs as much as $1213.
I love QuickBooks. I have been using it for 10 years. Besides offering all the ever-increasing best features at great prices, Quickbooks has an exceptional sentimental value. While other software has focused more on corporate clients and offering too little features for the small business packages, quickbooks have stood by the small businesses for almost 40 years!
Interested in learning more about Quickbooks and how it can help your business? Then shoot me a message!