Mekari Jurnal
Daftar Isi
10 min read

8 Essential Tips For Your Small Business Bookkeeping

Tayang 07 Sep 2022
Last updated 14 December 2023

As a small business, it’s important to pay attention to the bookkeeping process. How can you manage your business in terms of its finances through bookkeeping? Here are some tips to guide you as a small business.

The terms “bookkeeping” and “accounting” are frequently interchanged. In reality, bookkeeping is a small but important part of the accounting process.

Accounting is the process of using such data to determine a company’s financial position and make financial management decisions, whereas bookkeeping is the process of recording and reporting financial data.

How Does A Small Business Do Their Bookkeeping

A  small business’s day-to-day finances are managed through bookkeeping. It contains the following items:

  • Paying your bills
  • Getting paid by clients and customers
  • Ascertaining that your company pays the correct amount of tax
  • Making a tax refund claim for your company (e.g. expenses)
  • Payroll management to ensure that your employees are paid correctly

Three financial records are used by bookkeeping to track payments in and out of the business:

  • Cashbook – This is where you track your cash flow (everything that comes in and goes out of your company’s account).
  • Sales invoice – Keep track of everything you’ve sold, which includes both paid and outstanding debts.
  • Purchase invoice – this keeps track of what you’ve bought (including services) and how you paid for it.

Tips on How You Can Manage Your Small Business Particularly in Bookkeeping

Tips How You Can Manage Your Small Business Particularly in Bookkeeping

These tips below will assist you in getting started with bookkeeping for your small business.

1. Keep track of all payments

Use your books to keep track of all payments and note when they were made or received so you can quickly locate them if you need to.

2. Decide on an accounting system

Because your bookkeeping will support your accounting, pick which method you’ll utilize right away. Income and expenses are recorded in traditional accounting at the invoice date.

They are recorded in cash accounting on the date you receive or pay the money.

3. Adhere to deadlines

Never pay late (particularly tax) and set your clients a payment date so you can properly hunt them down. Keep note of any late payers and, if they fail to pay, consider terminating your contact with them.

The goal is to maintain a healthy cash flow, which is referred to as credit control.

4. Keep a record of your expenses

The next essential tip for small business bookkeeping is to lower your overheads, you can claim tax credits on a variety of company expenses. Receipts will be required to prove your claims, so keep them safe and organized in different company categories.

Keep business and personal expenses separate so you can quickly see which ones can be deducted from profits to save money on taxes.

5. Organize bank statements and invoices

Alternatively, don’t waste your bookkeeper’s time and money. Check that all bank statements and invoices (both purchase and sales) are present, correct, and in chronological order.

Otherwise, you’ll be paying your bookkeeper for time spent finding and organizing these data, which you could do yourself. Worse, if documents go missing, you may face a penalty for late filing.

Separate files for paid and outstanding purchase invoices (money you owe), then sort them alphabetically by supplier name. Remember to move invoices once you’ve received payment.

6. Create a monthly report

Creating reports at least once a month is the most effective bookkeeping approach to remaining on top of your small business finances and avoiding unpleasant surprises.

A profit-and-loss statement and a balance sheet should be included in your monthly reports at the very least. You now get continuous information on how well your company is doing.

7.  Consider hiring a bookkeeper if needed

If your company is just getting started, it may make sense to do your own bookkeeping.

Keep track of how much time you spend on the books each week as you progress. Calculate the monetary value of your time (for example, how much revenue you make per hour) and compare it to the cost of a bookkeeper.

It may only take a couple of hours for a professional bookkeeper to handle a month’s accounts, so it won’t be long until this is better value.

8. Use a reliable accounting software

There are several good accounting software that can help you in the bookkeeping process. Mekari Jurnal is one of the bookkeeping software to use.

It comes with features including recording transactions, generating invoices, generating financial statements, and also bookkeeping.

Get Mekari Jurnal pricing and 14 days free trial or contact us for more information.

So, those are the tips for you especially if you run a small business, and what you can do to make sure the bookkeeping runs smoothly.

Bookkeeping Basics for Small Businesses: A Comprehensive Guide

Bookkeeping is an integral part of managing the financial health of your small business. It involves the systematic recording, organization, and management of financial transactions, playing a vital role in decision-making, compliance, and overall business success. In this comprehensive guide, we will delve into the essentials of small-business bookkeeping, covering everything from setting up accounting software to choosing the right bookkeeping method and handling various financial tasks. Whether you’re a business owner looking to do your own bookkeeping or considering outsourcing, this guide will provide valuable insights to help you navigate the world of small-business finance.

How to Do Bookkeeping for a Small Business

1. Setting Up Accounting Software

The foundation of effective bookkeeping is setting up the right accounting software. Accounting software streamlines various bookkeeping tasks, such as transaction categorization and financial reporting. Here’s how to get started:

– Enter Business Information

Begin by entering your business’s details into the accounting software. This includes your company’s name, address, contact information, and other relevant particulars.

– Connect Bank Accounts

Connect your business bank accounts to the software. This allows for automatic importing of financial transactions, reducing manual data entry.

– Grant Access to Your Accountant

If you have an accountant, provide them with access to the accounting software. This enables them to review and make necessary adjustments while ensuring compliance with accounting standards.

– Organize the Chart of Accounts

Review and organize the chart of accounts within the software to align with your business’s structure and financial needs. A well-organized chart of accounts simplifies transaction categorization.

2. Choosing an Entry System

Before you dive into bookkeeping tasks, decide whether a single-entry or double-entry accounting system is better suited for your business. Your choice impacts how you manage finances and maintain records. Here’s a brief overview of each:

– Single-Entry Accounting

Single-entry accounting records each financial transaction once, categorizing it as either an expense or income. It is straightforward and suitable for smaller businesses with fewer financial complexities. However, it may not provide a complete view of assets and liabilities.

– Double-Entry Accounting

Double-entry accounting records each transaction twice, as both a debit and a credit. This method ensures that all debits equal all credits, resulting in balanced books. While more complex, it offers a more accurate financial snapshot, considering equity, assets, liabilities, expenses, and income.

3. Selecting an Accounting Method

Choose between cash basis and accrual basis accounting, as it affects your financial reporting. Here’s a brief comparison:

– Cash Basis Accounting

Transactions are recorded when money changes hands. Invoices and outstanding bills are only recorded once they are paid. It’s simpler but may not provide a complete picture of your financial obligations.

– Accrual Basis Accounting

Transactions are recorded when they occur, regardless of when money is exchanged. This method aligns with generally accepted accounting principles and offers a more comprehensive financial overview.

4. Managing Transactions

Daily bookkeeping involves managing transactions, including categorization, reconciliation, and accurate recording based on your chosen entry system and accounting method. Regularly review transactions to identify and correct errors promptly.

5. Handling Accounts Receivable and Payable

– Accounts Receivable

For goods or services already provided, manage accounts receivable efficiently to ensure timely payments. Send invoices, track due dates, and follow up on outstanding payments using accounting software or dedicated invoicing tools.

– Accounts Payable

Ensure your business pays its bills on time to avoid late fees and maintain a positive reputation. Accounts payable includes expenses that have not yet been paid. Managing this effectively is crucial for cash flow management.

6. Setting Up Payroll

Determine whether you will process payroll within your accounting software or opt for a dedicated payroll software solution. Payroll management depends on factors like the number of employees and additional benefits offered.

7. Coordinating with a Tax Specialist

While you may not require ongoing assistance from a tax specialist, it’s advisable to establish a connection early on. Tax advisors help with tax preparation, filing, and maximizing small-business tax deductions, ensuring compliance with tax regulations.

8. Managing Financial Statements and Documents

Accurate recordkeeping is fundamental to bookkeeping. Record and store all financial documents, such as bills, invoices, and receipts, either within your accounting software or as physical copies. These documents serve as essential references for audits and error resolution.

Who Should Manage Small-Business Bookkeeping Tasks?

There are three primary approaches to handling bookkeeping for your small business:

1. Do It Yourself

With the assistance of accounting software, many business owners can manage bookkeeping tasks independently. However, be aware that falling behind can be challenging to catch up with, so ensure you have the time and resources to commit.

2. Use an Online Bookkeeping Service

Outsourcing bookkeeping tasks to an online service is a viable option. It allows for communication via email or phone, making it convenient and efficient. Services vary, so choose one that aligns with your business’s needs.

3. Hire an In-House Bookkeeper

Hiring an in-house bookkeeper provides access to their expertise and a deeper understanding of your business’s finances. They can work closely with your team and become familiar with your financial processes and tools.

The Importance of Bookkeeping for Small Businesses

Bookkeeping is essential for several reasons, making it a critical aspect of managing your small business effectively:

– Legal Separation

Proper bookkeeping separates business and personal finances, protecting your personal assets from business-related liabilities.

– Error Identification

Regular transaction management and reconciliation help identify errors early, preventing financial complications down the line.

– Financial Simplification

Efficient bookkeeping streamlines tax processes and collaboration with tax professionals, potentially saving your business money.

– Performance Monitoring

Monitoring your business’s financial health provides insights into areas for improvement and growth opportunities.

– Document Organization

Organized recordkeeping simplifies processes like applying for loans or making significant purchases, ensuring you have the necessary documentation readily available.


In conclusion, mastering the basics of bookkeeping is crucial for the success and growth of your small business. It serves as the foundation for sound financial management, decision-making, and regulatory compliance. Whether you choose to handle bookkeeping on your own, outsource it to a service, or hire an in-house bookkeeper, understanding its significance and best practices is essential. With proper bookkeeping, you can navigate the financial aspects of your business confidently and pave the way for long-term success.