How To Become an Independent Bookkeeper?

The fact that so many people dislike doing bookkeeping is good news for anyone who enjoys financial record keeping. Lacking time or inclination, entrepreneurs and growing businesses often need help with their financial housekeeping despite the availability of easy-to-use accounting software. As one Los Angeles bookkeeper told us, "While doing business is getting more complex, people aren't getting better at handling their money. Today virtually everybody needs some professional guidance.Yet most small businesses can't afford to hire or keep full-time bookkeepers.

Independent bookkeepers are in demand even during economic downturns because businesses realize that if they aren't careful about their money, they soon won't be in business. As a result, bookkeeping can be a good business year in and year out. However, more competition, because some accountants need more business to keep busy and will seek to pick up bookkeeping business. Accountants are no longer trained for small-business bookkeeping though, so thy outsource the bookkeeping work they get.

To be successful, independent bookkeepers need to be thorough, dependable and accurate as well as skilled in using accounting and sometime spreadsheet software. You must enjoy paying attention to details, and honesty and integrity are crucial. If you'd be tempted to go along with a client who asks you not to report or to hide income, it's best to look for another business because you won't last long in this one. A client who'll ask you to use questionable practices may have no compunction about not paying your bill.

1. Plan for major expenses.

 Put events like a major computer upgrade on the calendar a year in advance or, ideally, three to five years ahead. Acknowledge the seasonal ups and downs, something many entrepreneurs are reluctant to do.
This helps you to be honest about the fact that it's coming and plan for it.
You'll avoid taking money out of the company during the flush periods only to find yourself short in the slower months, when costly projects like upgrading computers or replacing factory components usually happen.

2. Track expenses.

A credit card that you use solely for business can be a basic accounting system.
Most card statements categorize expenses, so you can see which outlays relate to which business activities. If you always use your business credit card for business expenses, you're less likely to pay cash at, say, Staples and lose the receipts, forfeiting tax-time write-offs. Pens and printer paper can
Additionally, routinely jot down business trips, lunches, coffee dates and other events with cash outlays in your electronic or paper day planner. This habit can go a long way toward substantiating those items for your tax records in the event of an audit.
One of his clients provides a link to a Google map for each trip instead of trying to remember to note the mileage for every trip he takes on his odometer. That data, along with a day planner recording the trip, are usually enough record keeping to satisfy tax authority's.

3. Record deposits correctly.

Adopt a system for keeping your financial activities straight, whether it's a notebook you use consistently, an Excel spreadsheet or software such as Quickbooks. Business owners typically make a variety of deposits into their bank account through the year, including loans, revenue from sales and cash infusions from their personal savings. The trouble, is that at the end of the year, you or your bookkeeper might erroneously record some deposits as income, and consequently pay taxes on more money than you've actually made.

4. Set aside money for paying taxes.

Systematically put a portion of money aside throughout the year for taxes. Then note tax deadlines on your calendar, along with prep time if you need it, to make sure you actually make payments when they're due. Payroll taxes that go unpaid can be especially problematic. Cash-crunched entrepreneurs get through a down cycle by dipping into employee with holdings that they should have sent.

5. Keep a close eye on your invoices.

Assign someone in your organizations to track your billing. Then put a process in place for issuing a second invoice, making a phone call and perhaps levying penalties such as extra fees at certain deadline.

Some entrepreneurs believe that once they've sent out an invoice, they've taken care of billing.