Bookkeeping is the process of keeping a record of every single financial transaction in your business. Transactions include receiving payment from your customers, paying your company’s bills, and other company expenses.It’s an essential small business function because all businesses need to know how much money they are bringing in, how much they are paying and what their profit is regularly. Without bookkeeping, you may have no idea how much profit you make daily, week to week, or month to month. And without profit? You can’t stay in business.

The most common bookkeeping mistakes small businesses make are poor record-keeping and not reconciling accounts. Both make your business vulnerable to costly mistakes. They can also lead to a lack of accurate knowledge about your cash flow and profits and inaccurate financial statements. These are dangerous to your business because they can lead you to overspend or make poor decisions in the short term and to your business simply not being profitable in the long term.In addition, poor record-keeping can cause your tax filings and payments to be inaccurate, which can lead to fines and penalties.There’s one more common bookkeeping mistake, too — and that’s trying to do it yourself. Many small business owners assume that bookkeeping is simple and easy to manage. In fact, even simple individual bookkeeping functions can end up being a drain on your time and lead to frustration. Bookkeeping is also complicated enough that it’s easy to make mistakes. It’s better to hire a third-party service provider or bookkeeper than to spend way too much time on bookkeeping tasks and run the risk of error. If you’re looking for a cost-effective, all-in-one service,

A bookkeeper is the one who keeps, records, and gathers financial data, while an accountant summarizes, interprets and communicates this data for financial decisions. The two roles are very similar, but still very different.While an accountant can do bookkeeping tasks (but usually don’t), they are better suited to consulting work, such as preparing your financial reports and helping you understand the financial impact of your previous (and upcoming) decisions.

Yes, but it also depends on how much you’d like to micromanage.If you like having a tight rein over your company’s finances, being your own bookkeeper might work for you. However, our general recommendation is to outsource as it saves your time, money, and energy. Hiring a professional bookkeeper or accountant is always the better choice, as it can save you from making mistakes that could eventually cost you a lot.