What’s the Difference Between Payroll, Accounting and Bookkeeping Softwares?
Episode 713: Show Notes
Our mission in business is to help more women build profitable, sustainable businesses online. So much of that success is rooted in proper financial literacy. It’s so important to understand how to manage your finances so that you can take out enough money to live the life you want while at the same time ensuring that you leave enough money in the business so that it remains profitable in the long run. As you scale, money management becomes more complicated, but thankfully there are several different software options for payroll, accounting, and bookkeeping that can help!
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What Your P&L Statement Should Look Like
Just because you have a P&L statement, doesn’t mean it is automatically something that is helpful to you. So often, we hear about business owners who never look at their P&L statements because they don’t make sense or they don’t even know where to find them. If your P&L statements are properly set up, you’ll have so much important information about the financial side of your business in one place. But when a P&L statement just has one line item, it’s impossible to deduce what is really going on in your business. It doesn’t have to be complicated with line items for every single client, but what it should have is a line item for your signature service and then other line items for tiered services. And when it comes to expenses in our P&L statements, we like to break them down into categories so that we have some semblance of control.
The Gold Standard of Accounting Software
There are a number of different accounting software out there, but if you are handing things off to a CPA, QuickBooks is the gold standard. As a non-accountant, it may not be completely user-friendly, which is why hiring a high-quality bookkeeper who really understands your industry is essential. A good bookkeeper will not only put your P&L together properly, but they will also walk you through the P&L and give you feedback that empowers you to better understand it in the future.
The Benefits of Payroll Software
If you convert your business to an S corp, you will need to have payroll software above and beyond your bookkeeping software. Some accounting software has built-in payroll features, but that isn’t always the case. Certain software can really aid you in the human resources process by filing reports and automating certain aspects. If you have the right systems in place, your payroll can seamlessly integrate with your accounting. Gusto deals with everything from benefits to paid time off to payroll (and so much more that we haven’t even explored), and it is so easy to use!
When to Hire a Bookkeeper
If your business is bringing in around 6 figures, and you are planning on keeping your business going for at least three to five years, we would definitely recommend hiring a bookkeeper! When you’re doing your bookkeeping yourself, you may be able to effectively track your income and expenses but there are a lot of things that you might not know about that could save you money. Most people don’t understand the tax code, so it’s worth bringing in someone who can help you get the most out of it!
Quote This
Find yourself someone who can not just understand your industry and put together the P&L appropriately, but also walk you through it, educating you on how to better understand it in the future.
Highlights
What Your Proper P&L Statement Should Look Like. [0:11:52]
The Gold Standard of Accounting Software. [0:20:21]
The Benefits of Payroll Software. [0:22:15]
When to Hire a Bookkeeper. [0:24:37]
Today’s Guest:
Abagail & Emylee
The Strategy Hour Podcast
The Strategy Hour Podcast is a twice weekly show hosted by Abagail Pumphrey and Emylee Williams, the founders of Boss Project. Join us for semi-ranty biz conversations for service providers looking to ethically grow their agency businesses. Episodes cover everything from lead generation to leadership mindset to team culture and beyond.
Key Topics:
Scaling, Profitability, Money management, Bookkeeping, Profit and loss, Accounting, Payroll, Software
