As more and more people take the option to work from home, one business there is more of a need for would be home based bookkeeping businesses. First and for most in this would be payroll, simply being paying the associates of the company for the time they have worked. There are many different payroll software programs that you can chose from depending on what your needs are. Basically, for a small company payroll is usually pretty effortless using payroll software. Larger companies can be more complicated as there can be training time to calculate.
Generally all you need to do is install the software, and then put in your employee's information. All that should be required would be name, address, social security number, tax information and the hours that they have put in for the time period. The software will calculate both regular and overtime hours worked. Once you input your employees into the system, you should not have to do anything after that other than key in the hours they work unless their hourly rate changes.
In a home based bookkeeping business, another area of expertise that you are going to need to be familiar with is sales tax. This is very simple and all it requires is going to be some basic knowledge of your city tax and state tax. The Federal tax Administration has this information for every city & state on their website. All you need to do is multiply the percentage of sales tax for each dollar spent for both city and state taxes, add that to the total sale and you come up with the total due.
Keeping your General ledger, it is the very core of any company's financial records. Every financial transaction involving the company should be recorded in the General ledger. This is a permanent financial history of the company. You will have various different sub- ledgers, these will includes various items such as: cash, accounts receivable and accounts payable. Then there are things that may just go into the general ledger without being entered into any of the sub-ledgers, such as loans, sale proceeds, principal loan repayments.
The most essential part of your home based bookkeeping business is keeping track of your accounts balances. This is how you will determine if you are profitable or not. In the accounting system there are 2 different types of accounts, balance sheets and profit and loss sheets, the balance sheet is used to keep track of how much your business owes, what it owns and what it kept of its earnings. The profit and loss sheets track the current earnings, what the businesses revenue and its expenses. Both are extremely important in order for your business to stay liquid. You always need to know what you are spending and what you are making and of course what the bottom line of your profit margin is.
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