A Guide to Small Business Accounting

A Guide to Small Business Accounting (1)

As a small business owner, you have a lot on your plate. From managing employees to marketing your products or services, it can be overwhelming to also handle your business’s finances. That’s where small business accounting comes in.

Small business accounting is the process of tracking and managing your business’s financial transactions. It involves recording income and expenses, creating financial statements, and ensuring compliance with tax laws. In this guide, we’ll cover everything you need to know about small business accounting, including why it’s important, how to get started, and the benefits of outsourcing accounting services for small businesses.

Why Is Small Business Accounting Important?

Record Keeping

One of the main reasons small business accounting is important is that it allows you to keep accurate financial records. By tracking your income and expenses, you can get a clear picture of your business’s financial health. This information is crucial for making informed business decisions and setting financial goals.

Tax Compliance

Small businesses are subject to various tax laws and regulations. By keeping accurate financial records, you can ensure that you are complying with these laws and avoid any penalties or fines. Additionally, having organized financial records can make tax season much less stressful.

Business Growth

Having a solid understanding of your business’s finances is essential for growth. By tracking your income and expenses, you can identify areas where you can cut costs and increase revenue. This information can also help you secure funding or loans for business expansion.

How to Get Started with Small Business Accounting


Possessing the essential qualifications and experience is crucial. This equips you with the skills and knowledge required for a thriving business.

  • Earning the Professional Bookkeeper™ certification from Universal Accounting School demonstrates proficiency in applying accounting processes tailored for small to mid-sized businesses. This certification reflects a dedication to providing high-quality service and is well-suited for the growing demand for skilled professionals in small-business bookkeeping. Whether you aim to specialize or advance in your career, this program leading to a bookkeeping certificate is an excellent choice.
  • Additionally, the Color Accounting Program concentrates on enhancing your ability to communicate the needs of the businesses you serve to their owners. It simplifies complex concepts like balance sheets and PNLs, facilitating better understanding for clients.
  • Universal Accounting Center’s training programs extend beyond fundamental bookkeeping and tax filing skills. They offer thorough training to empower you with the necessary tools for starting your own business. These courses come with support from coaches who help in crafting a business plan and devising effective marketing strategies. This roadmap provides a structured framework, enabling you to navigate the competitive accounting industry confidently. It ensures that your firm is well-prepared for growth and can adapt to changes in the market.

Choose an Accounting Method

The first step in setting up your small business accounting is to choose an accounting method. There are two main methods: cash basis and accrual basis.

  • Cash Basis: This method records transactions when money is received or paid. It is simpler and more straightforward, making it a popular choice for small businesses.
  • Accrual Basis: This method records transactions when they occur, regardless of when money is received or paid. It provides a more accurate picture of your business’s financial health but can be more complex.

Set Up a Chart of Accounts

A chart of accounts is a list of all the accounts used in your business’s financial transactions. It helps you organize your finances and makes it easier to track income and expenses. You can create a chart of accounts using accounting software or a spreadsheet.

Record Transactions

Once you have your accounting method and chart of accounts set up, you can start recording transactions. This includes income, expenses, and any other financial activity related to your business. Be sure to keep all receipts and invoices for reference.

Create Financial Statements

Financial statements are a summary of your business’s financial activity. They include an income statement, balance sheet, and cash flow statement. These statements provide a snapshot of your business’s financial health and are essential for making informed business decisions.

Use Accounting Software

While you can manage your small business accounting manually, using accounting software can save you time and reduce the risk of errors. There are many options available, so be sure to research and choose one that best fits your business’s needs and budget.

The Benefits of Outsourcing Accounting Services for Small Businesses

Save Time and Reduce Stress

Outsourcing your small business accounting can save you time and reduce stress. As a business owner, your time is valuable, and handling your own accounting can be time-consuming and overwhelming. By outsourcing, you can focus on other aspects of your business while leaving the financial management to the experts.

Access to Expertise

Outsourcing your accounting also gives you access to expert knowledge and experience. Professional accountants are trained and experienced in handling small business finances, and they can provide valuable insights and advice to help your business grow.

Cost Savings

Outsourcing your accounting can also save you money in the long run. By hiring an outside firm, you can avoid the costs of hiring and training an in-house accountant. Additionally, outsourcing can help you avoid costly mistakes that could result in fines or penalties.


As your business grows, so will your accounting needs. By outsourcing, you can easily scale your accounting services to meet your business’s changing needs. This flexibility allows you to focus on growing your business without worrying about managing your finances.

Outsourcing Small Business Accounting

If you’ve decided to outsource your small business accounting, you may be wondering how to find the right service for your business. Here are a few tips to help you find small business accounting services near you:

  • Ask for Referrals: Reach out to other small business owners in your network and ask for recommendations. They may have experience working with accounting firms and can provide valuable insights.
  • Research Online: Use search engines to find accounting firms in your area. Be sure to read reviews and check their website for information on their services and pricing.
  • Attend Networking Events: Networking events are a great way to meet other business owners and professionals in your area. You may be able to connect with accounting firms and learn more about their services.

Thinking of Starting an Accounting Business

Embarking on the journey of starting your own accounting business might seem overwhelming, but with Universal Accounting Center, success is within reach. Our training programs not only help you certify your skills through exams but also provide one-on-one coaching support. You won’t be alone in this venture; instead, you’ll have a team of experts guiding you.

To kickstart your path to a thriving accounting schedule a discussion about your entrepreneurial future. With meticulous planning and their support, you can reach the peak of success in the accounting world.


Americans are seeing smaller tax refunds in 2024, with the average refund through Feb. 2 at $1,395, down from $1,963 last year. The IRS attributes this to a delayed start to the tax season, having issued only 2.6 million refunds compared to 8 million by the same time last year. The agency assures a strong start to the filing season, with no alarms raised.

Possible reasons for smaller refunds include workers not adjusting tax withholding after salary increases, ‘gig’ workers not increasing estimated tax payments, and increased investment income triggering higher taxes. The IRS expects over 128.7 million returns by the April 15 deadline, with most filers receiving refunds within 21 days if filed electronically with direct deposit.


Small business accounting is a crucial aspect of running a successful business. By keeping accurate financial records, complying with tax laws, and using the right tools and resources, you can set your business up for growth and success. Consider outsourcing your accounting services to save time, reduce stress, and access expert knowledge and experience. With the right accounting services, you can focus financial planning, growing your business and achieving your goals.

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