A Short Brief for Beginners on Day-to-Day Bookkeeping
Recording everyday financial transactions and information regarding a business consistently is what is considered day-to-day bookkeeping. Keeping accurate records is crucial for getting key financial insights for business growth and making informed decisions to remain competitive.
Day-to-day bookkeeping helps you build a timeline and plan your business’s success strategy accordingly. Since the beginning of bookkeeping, two bookkeeping entry systems have been used where both use the same accounting data based on a different logic. These two bookkeeping methods are single-entry bookkeeping and double-entry bookkeeping.
What Is Single-Entry Bookkeeping?
Single-Entry bookkeeping is a simple method of maintaining transactional records as a single entry in a journal. The advantages are that it is simple and easy with less time to keep the records. It is perfect for small businesses because of the low volume of transactions.
With advantages, there come disadvantages as well. Disadvantages include discrepancies and less accuracy in the records. It is not meant for large-scale businesses because of the complex financial needs.
The single-entry bookkeeping system is majorly different from double-entry bookkeeping. Double-entry bookkeeping is for large-scale businesses, unlike single-entry bookkeeping. In the double entry method, debits and credits are required to be the same to provide accurate data.
It specifies that double-entry bookkeeping fits only without error, whereas the single entry is prone to error and has no way to fix it.
A Short Brief on Double-Entry Bookkeeping
Double Entry Bookkeeping is a two-sided record that comprises debits and credits. This system is based on the two parts transaction and impacts two ledger accounts. Here, the credit is written to the right, and the debt to the left, where debt represents taking benefit and credit means giving benefit.
It provides the complete financial picture and helps the business make informed decisions. Double-entry bookkeeping help gain considerable credit from investors.
The principle of double entry, which forms the basis of modern bookkeeping and accounting, holds that every monetary transaction has opposite consequences in at least two accounts. Debits and credits are the records of purchases and payments in the double-entry system.
The total amount of debits must always equal the total amount of credits since a debit in one account cancels out credit in another. The double-entry bookkeeping system increases the reliability of financial statements and the efficiency with which errors may be uncovered.
How to Choose the Best Accounting Software for Your Business?
Firstly, let us know the accounting software leading the digital accounting solutions market. In this modern time, we have QuickBooks, FreshBooks, Zoho Books, Xero, Wave Financial, Oracle NetSuite, Plooto, Melio, Neat, etc., if you are looking for software that stands out on your requirements.
- Check if you are looking for online or offline software.
- Ensure Data Security; opt for a reliable cloud hosting service provider if you use online software.
- Check for the required features, such as invoicing, expense tracking per category, bank transactions import feature, tax management, multi-currency transactions, etc.
- Prioritize easy navigation software that should be user-friendly and easy to learn.
- Check for Scalability and opt for the software that offers versions according to the size and type of the business.
- Software must have an easy data export feature in case bugs appear.
- Look for software that provides the best after-sale services, such as prompt service and support via multiple channels such as phone, mail, chat, etc., quick response time, user guides, and regular software upgrades and updates.
|Small Business Accounting
How to Maximize Your Tax Deductions?
There are many ways that you must know to reduce your tax burden in legitimate ways.
Make Some Recognized Charity
Donating to a charity for a worthy cause will pave the way for you to reduce tax liability. Making such charities offers you the option to avail of an end-of-year statement if you regularly donate, which is a good practice that society appreciates.
Itemize your deductions and lower your gross income via charitable donations. And the best part is that your tax returns will not be affected when you claim a standard deduction for your contribution to the charity.
Delay Receiving your Income
Any expenditures you wish to deduct from your taxes must be within the same fiscal year. You cannot claim a personal or business tax deduction for an item you anticipate incurring in 2023. However, you also do not have to worry about paying taxes on the revenue that has not been generated yet. As a result, you will have a rare chance to postpone some of this year’s revenue until next year.
This may be viable if one’s annual income is highly unpredictable. You may put off your year-end payments until after December 31, 2022, as taxes are only due when you get your income. You can add this money to your 2023 tax return.
Make Advance Payments on Business Expenses
Tax deductions for small businesses must be claimed in the same year the payment towards them is made. You can maximize your deductions by making early payments to the running expenses of your business. This works in the same way as postponing the revenue generated to the next year.
If you are running a small business, you must keep yourself updated with the business expenses which are tax deductible. Think about any payments you need to make toward your business right before the year ends. You can add these expenses to the current year even if you get the product or service next year.
File Your Taxes Online in Minutes
Short on time to complete your tax return by hand? Use the following most straightforward tax preparation software to file your taxes online in minutes. However, ensure you follow all tax rules and regulations by consulting with experts at every stage.
- Cash App Taxes: This app, previously known as Credit Karma Tax, has been used to file 9 million returns. The software is entirely free for tax filing with no barriers in the way.
- MilTax: Only eligible military and veteran families can use this free online software to file a federal return electronically.
- Free File Fillable Forms: The application is equivalent to the paper tax return and offers the most common tax forms to submit electronically.
Since our tax experts are saviors in every situation, especially in a crisis, you can contact them for tax filing 24/7.
Free Online Invoicing Software
Do you want to improve the way you bill customers? Get rid of the hassle of manual billing and wow even the pickiest clients with polished invoices generated by these user-friendly invoicing software.
For day-to-day bookkeeping, you can make your invoices appear as fancy as you like.
Invoice templates are perfectly customizable, and you can easily add a logo and color of your choice. Your customers can forget to pay you on time due to several reasons, but with automatic reminders, you can rest easy knowing they will not.
Still, there is more to come! If you integrate payment processing systems with your invoices, your customers may pay you without having to write checks or deal with cash. In addition, these free online invoicing software enables you to see your bills online, so you can easily monitor your invoicing from any location.
So why bother with antiquated bill-management programs? It is time to make the leap if you are ready to wow your customers, simplify your accounting, and speed up your payments.
Some free online invoicing tools to use in day-to-day bookkeeping:
- Zoho Invoice: Millions of people have recognized the brand Zoho for its usage and features. Zoho provides Zoho Invoice help with professional invoices, tracking of expenses, payment reminder, getting paid faster, etc.
- Invoicely: This is one of the most powerful invoicing platforms to get your finances back on track. The software is straightforward and free to use.
- Square Invoices: For all-in-one invoicing, Square Invoices is free and help businesses manage their invoices. Using it, you can request, accept, and record payments from worldwide customers.
10 Best Free Invoice Templates for Small Businesses
You may save time and effort using a free invoice template for day-to-day bookkeeping. If you own a small business, you may immediately benefit from using one of the best free invoice templates we have hand-picked for you.
Let us understand the invoice template and its worth to you. When you use an invoice template, you only need to replace the default information with your company’s specific information. All you need to do is provide the required fields to fill in itemized information regarding your e-commerce products or professional services. In addition, it generates a unique number assigned to each new invoice, and these numbers are used in tracking the invoices you send.
Do not consider free as not worthy!
Here are some benefits of using a free invoicing template.
- You will save time as you have already customized the invoice with your business information.
- Narrow down your focus on crucial information that cannot be missed.
- You can use branded look for each invoice, making it recognizable to your customers.
- Brings professionalism in overall sales operations.
Using the invoice templates, you can promote other products and services or can thank customers.