Bookkeeping is the process of collecting and organizing data on all of your business’s financial transactions. Every expense, payment, as well as any profit is accounted for. This includes sale invoices, payroll ledgers, accounts receivable, assets, and liabilities. Bookkeeping is essentially your business’s cash flow management. It shows how well the company is performing and which areas need attention. Documenting all cash flow in detail gives you a complete overview of your financial activities and your business’s financial state. This overview of the types of bookkeeping will touch upon the difference between single-entry and double-entry bookkeeping, what methods of bookkeeping exist, and how important regular recording of financial transactions is for running a successful company. Basic Bookkeeping Transactions Incoming and outgoing finances are the two main types of business transactions under your bookkeeping. Incoming finances are your income/revenue, which is all the money earned, sales, and profits. In turn, they become assets, which are all the existing property owned by your business. Any preexisting cash and property are also included. Outgoing finances are the company’s liabilities - mandatory payments, taxes, and loan installments - and expenses: money used to pay for services, employee salaries, and operational costs. After these two main bookkeeping categories, we have equity or the difference between the company’s assets and liabilities. How Does Bookkeeping Differ from Accounting? Bookkeeping needs to be done first, before the accountant can analyze the company’s books. It is an essential part of any business finance management. Accounting is the later process where all collected and complete financial data - the trial balance - is analyzed. Accounting includes drawing financial statements based on which timely business decisions can be made. Accountants are also responsible for financial advice and tax returns. Methods of Bookkeeping and How They Work Let's take a look at the specifics of the single-entry and double-entry method. Single-Entry The single-entry method records individual transactions as they happen. Once a sale or payment is received, or an expense is made, it’s documented as a stand-alone entry, plus its minimal details. This bookkeeping method is best suited for smaller businesses. It’s also adequate for operations where there’s little to no physical sales or inventory involved, i.e., digital transactions, services, and those with little or no physical goods to exchange. Single-entry systems offer multiple advantages: They are simple and therefore save you time and money. Besides, they usually don’t require additional staff or training. Of course, there are some downsides as well. These include possible loopholes that can be exploited to cover up mistakes and fraudulent transactions, especially if no software or app is used and everything is manual. Furthermore, there is no fast way to check for balances, liabilities, and on-time payments, which can result in penalties and late payments. Also, arithmetic errors in the account totals are relatively common. Using these simple bookkeeping systems for small businesses is a feasible solution, but it most likely won’t be enough for complex operations, where ready financial snapshots are often necessary to help make informed and timely decisions. Double-Entry Double-entry systems are more complex since every transaction is entered twice: in the left-hand account under Debit and in the right-hand account under Credit. Double-entry bookkeeping is used for larger and more complex business operations, and it works like an error-detection tool since the sum of debits must always equal the sum of credits. If it doesn’t, it points to an error. Using the double-entry system makes it easier to monitor all activities and ensure all your books are balanced. The rough total of your capital gap is easily determined. However, it’s a time-consuming and costly process, and utmost accuracy is needed when making entries. It usually requires extra training, staff, and software for it to be fast and effective. Also, due to the complexity of the system, finding where the error is and correcting it can be challenging. Compared to the single-entry bookkeeping system, double-entry is a more thorough, time-consuming approach to bookkeeping. Most smaller businesses don’t have time, resources, and extra people to work on detailed bookkeeping. But the results help companies cover everything being exchanged. It also provides instant access to all data. These are the two basic systems a company can use for bookkeeping. In the past, all entries had to be made manually. With the advancement of technology, various kinds of accounting software and apps have come to the bookkeepers’ aid. Digital Bookkeeping Systems Businesses can reap many benefits from using bookkeeping apps. All primary operations are automated and can be carried out remotely from your phone anytime, anywhere. The main features and automated functions of these apps include: Tracking all outgoing payments and fund transfers Digital tracking of all incoming finances Reports available anytime for mass sending Encryption of financial and confidential business data Apps for both iOs and Android devices Affordable monthly rates starting at $9 External functions such as e-filing and online banking Bookkeeping software such as Quickbooks, Freshbooks, and Zoho have basic accounting features in addition to their comprehensive tracking and management systems. Smaller businesses employing the single-entry method can use these apps to speed up the process further and increase accuracy. If you own a small business and are bent on cutting costs, the chances are that with one of these apps, you won’t even need to hire a bookkeeper - you’ll be able to do the bookkeeping yourself. Virtual bookkeeping means that independent, remote bookkeepers will manage and balance your books instead of a physically present bookkeeper. This is often a time- and cost-saving option for companies. A virtual bookkeeper can manage and monitor your finances in real time beyond office hours. It can be a good solution for companies with a bigger budget allocation specific to these tasks, covering many departments and their complex financial dealings for the company. Often, there are inventories and accounts payable and receivable that need to be checked and prioritized. How Bookkeeping Benefits Your Business There are many advantages to bookkeeping. Financial insights from tracking all your financial transactions will help you manage the business, maintain supplies and payrolls, and keep payments on time. This way, you’ll avoid costly penalties and other negative consequences of late payments. All numbers will match when your books are balanced at the end of a month, quarter, year, or another specified period. These detailed lists of numbers may look complex and intimidating, but when laid out and checked, they’ll enable you to easily assess priorities. Even just a simple bookkeeping system can help detail the financial state of your company. Your working capital gap is a good indicator of this - it’s the total difference between your assets and liabilities. Positive cash flow is maintained and received on time. From here, you can allot budgets and give priority to specific expenses or additions to inventory or assets. Being able to execute the business’s balances correctly and on time will help the company deal with loans, bank payments, and other obligations more efficiently. All of the bookkeeping methods discussed here will help you control your company’s finances and can be a big help to avoid penalties and bigger financial issues when going through an audit process.
Tax automation provider Avalara announced on April 20 that it had bought assets and expertise from DAVO Technologies, a company that helps businesses automate sales tax requirements.Based in Maine, DAVO uses cutting-edge technology to connect with POS systems and automatically gather tax-related data. This allows it to accurately file and pay sales taxes to the state and local authorities on their clients’ behalf.DAVO’s base of clients across the US includes more than 4,000 businesses from various industries, including restaurants and coffee shops, bike stores, local flower shops, and many others. The financial terms of the agreement have not been disclosed.DAVO’s instant integration with the most popular POS systems - like Square, Quickbooks, and Clover to name a few - empowers Avalar to provide all-in-one compliance solutions that help small businesses and startups manage their daily and ongoing tax requirements.“Avalara and DAVO are natural extensions to one another; our services are complementary, and we believe there is an immediate opportunity for value to their customers and our shared partners. The DAVO team has built an excellent, customer-centric product and we are delighted to partner with them to help improve and expand upon their capabilities,” said Jayme Fishman, Avalara’s EVP of corporate development.DAVO integrates seamlessly into your business environment to collect data needed for paying sales taxes and filing tax returns. It’s an automated service that simplifies tax-related tasks with the 100% accuracy that only great bookkeeping services can provide. With Avalara’s products - like business licenses and compliance documents - DAVO will be able to provide even better and more comprehensive services.“This acquisition is an amazing opportunity for the DAVO team, partners, and especially our customers. There has never been a more important time to support the local business community - the backbone to local economic development and community support. We are confident that together with Avalara we can make their day-to-day even easier, so they can focus on their business and leave the sales tax to us,” said Pete Murray, CEO of DAVO.The company’s press release also includes forward-looking statements regarding the expected “growth opportunities and synergies arising from the acquisition,” as well as potential risks that could lead to different material results than those predicted by the forward-looking statements.
On April 23, Tickmark, a Virginia-based software provider, launched a completely cloud-based solution for accounting and bookkeeping services for small and medium-sized businesses.Tickmark’s new cloud-based solution uses Azure/AWS technologies to provide even better bookkeeping and accounting service to small and medium-sized companies. The company’s spokesperson said the new software product is more reliable, faster, and more customizable, so it can fit the needs of any business. The company’s main goal is to provide smooth virtual bookkeeping and accounting, enabling clients to complete complicated accounting tasks quickly and then focus on their business goals."Our end-to-end virtual accounting and bookkeeping services aim to replace all traditional forms of paper-based bookkeeping by transferring all functions into cloud-based systems. This will provide a high-level scalable, reliable, and accessible platform for our clients," Tickmark’s spokesperson said.The company’s team of experienced bookkeepers and accountants worked on designing this accounting software solution. It’s a step further in helping companies move from traditional paper bookkeeping to a cloud-based service that allows businesses to stay compliant and makes their accounting and payroll easier."We help companies master compliances, finances and understand the challenges of managing the finances. Ours is a global shared service powered by unmatched technology that provides fast and accurate results. We will give you several different options of accounting software as that will help you choose the right one that matches your business needs," the company’s spokesperson said.In order to protect clients’ sensitive business information, the company guarantees a completely safe and secure cloud-based environment. In addition, Tickmark’s goal is to offer a fully customizable software solution for all business types and sizes, making it more affordable and easier to implement in anyone’s business strategies."It is our mission to make online accounting more affordable. Cloud-based technology has enabled us to provide seamless end-to-end services that cater to all business needs,” the spokesperson said. “Companies will not have to hire, train or maintain in-house accountants, and it will help them save tons of money as virtual bookkeeping services offered by our company are affordable.”
According to a company press release, Tribe Property Technologies has purchased the rental portfolio of KEY Property Marketing, which consists of approximately 75 service contracts. The closing of this deal marks Tribe’s first acquisition as a public company.“This is a strategic step for us in further expanding Tribe’s ability to deliver services to condominium investors who are looking to rent out their units in the BC market,” said the CEO of Tribe, Joseph Nakhla.Tribe is a property management company that focuses on providing owners, residents, councils/boards, real estate developers, and vendors with services that combine innovative technology and hard-working staff members. These services include condo/strata and rental management, a community platform, as well as developer and landlord tools.KEY Marketing was founded by Cam Good in 2009. It offers real estate design, marketing, and sales services. In 2015, Good acquired KEY Property Management, which specializes in finding quality sites for developers and connecting them with buyers.In regard to the purchase, Good said: "This sale allows me and KEY's Leadership Team to focus on the rapid growth of KEY Marketing while Tribe better services people investing in condos."This latest business venture is just one of several big steps Tribe has taken in recent months. Late last year, the company bought Gateway Property Management, making it the sixth largest condo management company and the sixth largest rental management company in Canada. On April 14, 2021, it began trading on the TSX Venture Exchange. Currently, Tribe’s property management platform is being used by a number of condominium complexes and residential communities throughout Canada."We believe that the independent owner-investors market is a big market that is currently underserved. With three out of every 10 condos being rented to tenants in both Vancouver and the Greater Toronto Area, we are aiming to improve that experience for both investors and tenants with our technology platform and services," Nakhla added.
The Small Business Administration has announced in a press release that restaurants most heavily affected by the pandemic will receive stimulus money from a fund worth $28.6 billion.The funds form part of the $1.9 trillion economic stimulus bill - called the American Rescue Plan - which was passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021. Restaurants that have suffered revenue loss due to the pandemic will be able to apply for up to $10 million per business and no more than $5 million per physical location.SBA administrator Isabela Guyman said the administration is “focused on ensuring that the RRF program’s application process is streamlined and free of burdensome, bureaucratic hurdles – while still maintaining robust oversight.”Various businesses in the food and drink industry are eligible to apply for the Restaurant Revitalization Fund program, including restaurants, food stands/trucks/carts, caterers, bars, saloons, lounges, taverns, bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, distilleries, inns, and licensed facilities that produce alcohol and allow people to taste, sample, or purchase their products.The official timing of the application’s launch is yet to be announced. What is known is that after the program opens, for the first 21 days, the SBA will accept applications from all eligible applicants, but will only process those submitted by women, veterans, and socially and economically disadvantaged business owners. Once the 21 days are up, all applications will be treated equally.The SBA is collaborating with numerous business stakeholders to ensure that the application process goes smoothly and to discuss any potential concerns regarding the relief package.“The USBC believes this initiative and collaboration with the SBA will bring needed resources and relief to these often underserved businesses to aid in stabilization, recovery and ultimately, strengthen our economy.” said Ron Busby, Sr., the President and CEO of U.S. Black Chambers, Inc. (USBC).As some of the best LLC Companies, the SBA is committed to providing individuals with the resources they need to start their own business and run it successfully.