Reasons Why Every Small Business Needs Accounting Solutions
Starting a small business is a dream for many of us, especially the ones who are stuck in their 9-5 jobs rut. For majority of the population, working for somebody else and being answerable to someone other than themselves is not a pleasant feeling. It is only natural to get tired and sick of the routine soon.
The only feasible option in such a situation is to launch your own small business or a home based business. The general feeling is that owning and running a small business is a piece of cake and self employed individuals have no worries to bother them. Well, this is far from true. The only difference between a self employed individual running their own business and an individual who works for somebody else is that of income and flexibility of work timings. Both individuals have their own share of worries and concerns.
Topmost Concern of Small Business Owners
Other than finding clients and projects and maintaining a steady source of income to take care of their needs and that of their family, the topmost concern for self employed people is maintaining their finances and accounts in order. If you are already running a home based business, you already know how frustrating it can be to deal with book keeping, accounting, tax payment, record maintenance etc on your own.
When you are working for someone, your employer / company manages all the record keeping and you do not have to bother yourself with any of them. This explains why it is very necessary to have the right professional accounting solutions for small business.
First things First
Before you can find accounting solutions to overcome your problems, you first need to get certain things done. As soon as you decide to change over from employment to home based business, you will have to register with the IRS. But before you do that you need to categorize your small business in to any one of the following six categories:
- Sole Proprietorship (managed and run only by you)
- Partnership (managed and run by you and another partner/ s)
- S Corporation
- LLC (Limited Liability Company)
- Franchise (you buy the rights and license to run a small branch of a bigger business that belongs to another company)
Do You Need an EIN?
The answer to this question depends upon the category into which you classified your small business into. In general, if your small business has employees or is a corporation / partnership, you will need an EIN (Employer Identification Number)
What are the Financial Documents Necessary in Accounting?
At first, when you start out with your own business, you may not be sure as to what documents need to be preserved as a record and what documents can be disposed off. To stay on the safer side (until you learn the ropes of the trade) make a habit of preserving every single document and email that has got anything to do with your business, albeit remotely.
Needless to say this includes all the receipts, sales invoices, bank statements, all communications with vendors or clients, a clear record of all related expenses in your business like travel miles etc. Don’t lose sight of the fact that you will be taxed on your profits and not on your income, so make sure that you note down all your expenses.
Best Accounting Solutions for Small Business
Considering how much of work is involved in manually maintaining the aforementioned documents and records, it makes business sense to invest in account management software to deal with all the paperwork. Needless to say these are the best accounting solutions for small business.
Free Accounting Software for Small Business
Free is always welcome and more so when you already have a lot of expenses to deal with in running your own small business. Here are a few free small business accounting software for you to check out:
- Intuit Billing Manager
- Wave Accounting
- Zoho Invoice
Hope these resources help you find the small business accounting solution you have been desperately looking for. Take care and enoy!