No Beating around the Book: Basics of Bookkeeping
Keeping the books accurate and up-to-date is key for any business to succeed. The last thing anyone would want is to have more money leaving than coming in and, worse yet, to be unaware of it! Whether big or small, all businesses could potentially benefit from hiring a bookkeeper to take care of the cash. In essence, bookkeeping is financial record-keeping. Bookkeeping has been around for nearly as long as humans have been around, trading. These days, bookkeepers have traded in stone slabs for computers with software to perform their work.
Are Bookkeepers and Accountants the Same?
As well, nowadays, bookkeepers tend to work closely with accountants. In simple terms, bookkeepers provide their financial documentation to accountants to analyze and interpret. Bookkeepers keep track of day-to-day transactions while accountants perform bigger picture work to forecast the financial future of the company and counsel on any decisions that may affect the company’s financial health. Bookkeeping does not tend to require the same level of education that accounting does, which is typically a four-year post-secondary degree and possibly additional accounting accreditations. Although there are distinctions, bookkeepers and accountants work in tandem and often depend on each other. Bookkeepers provide their work to accountants for them to do their work and accountants advise bookkeepers on what they do.
A Bookkeepers’ To do
The financial record-keeping done by bookkeeper’s can be broken down into different tasks. To perform these tasks, bookkeepers also apply skills of fault-finding, discretion and thoroughness. Bookkeepers post debits and credits perform bank reconciliations, draft invoices, pay suppliers and contractors and process payroll. In keeping track of the money flowing in and out of a business daily, bookkeepers can also help to maintain a budget and note any red flags in the business’ operations with regards to the finances. Four financial statements that bookkeepers draft are income statements, balance sheets, cash flow statements and statement of changes in equity.
Big or small, it could be worth it for your business to inquire on what it would look like to hire a bookkeeper. Aside from having well-documented finances, a bookkeeper well-versed in their craft can save you plenty of time and frustration. Their record-keeping will make it much easier for your accountant during tax season and save you the headache of trying to put all your receipts together the night before you have to submit them. These financial records may also aid you and your accountant in forecasting for future decisions to promote continued growth. This also means that you will have great documentation for any audits to which you may be subjected. It is important to understand that bookkeeping cannot be done well by just anybody and, if you are considering outsourcing your financial record-keeping, an experienced and professional bookkeeper can reap your business many benefits.
Attribution: https://bookkeepingad.com