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Self-employed and small businesses bookkeeping

by newton
small business bookkeeping


As a self-employed person or a small business. You are probably wondering what is bookkeeping? Is it possible to do it easily by yourself?  Or should I entrust it to an accountant? In the following, we explain the basics of small business bookkeeping. Why it is useful and we suggest tools so that you can carry it out easily and independently

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Bookkeeping for small businesses

Bookkeeping is the act of categorizing all cash inflows and outflows into different classes of accounts and recording them in the general journal. The general journal records. Chronologically and continuously. All the economic operations carried out by the company during a period often called the fiscal year.

Making an accounting entry means recording at least two movements: a debit and a credit in the general journal. Note that in accounting, in the bank account, a receipt is recorded as a debit and a disbursement as a credit. Everything is based on a fundamental principle of double-entry bookkeeping.

That is to say, there is always at least one debit entry line and at least one credit entry line (but there can be several debit lines and only one credit line for the same operation, or vice versa). For the same entry, the sum of the debit entry lines must be equal to the sum of the credit entry lines. In accounting terms, this indicates that the entry is “balanced or balanced”.


Bookkeeping for the self-employed


The individual who is certainly self-employed needed to have accounting entries in the shape of a monthly and cumulative create earnings and expenses, such as the next supporting documents:


sales invoices

Invoices for business expenses

bank statements

The checks

Commission statements or deposit slips, and more generally any document likely to justify a professional expense.

These supporting documents must be filed and kept for 6 years for any accounting checks.


Benefits of good bookkeeping


Maintaining your books as much as date regularly and efficiently is really important for almost any entrepreneur. Not just does proper bookkeeping have the ability to satisfy what’s needed of the authorities, to make the appropriate payments on time, but in addition, it assists you to:


Immediately detect inconsistencies and discrepancies.


Control cash flow (liquidity)


Avoid errors and loss in documents.


Know the performance of your business in more detail and in real-time


Ensure business that is good and make informed business decisions.


How to do your bookkeeping?


As a self-employed person or a small business, using accounting software is the easiest way to do your bookkeeping and accounting on your own, at a low cost. With online accounting and bookkeeping software such as Kiwi, all you have to do is make transactions (invoice your customers and enter your expenses) and the software takes care of generating the journal entries for you. You therefore save time and limit the risk of error.


Check your accounting books with bank reconciliation


Usually performed at the end of the month, bank reconciliation (or bank reconciliation) is a process that serves to ensure that the company’s accounting books are in line with the bank statements. Accounting software like Kiwili allows you to import your bank statements and check line by line whether the transactions have been recorded in the general journal. Bank reconciliation is not obligatory, but it makes it possible to check the consistency of account data and to ensure the reality of the accounting situation. It is an essential measure for good bookkeeping.



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