The first and, probably, most crucial phase in the accounting process is bookkeeping. A bookkeeper will compile all financial data – from transactions to wages – and turn them into easy-to-read reports that are ready for future analysis. In this Article, we will go through the advantages of bookkeeping for any small business.
With all the changes in the financial world, every firm will want to have a skilled bookkeeper on staff because of the many advantages they offer.
What is Bookkeeping?
Bookkeeping is the recording of financial transactions on a day-to-day basis. It helps to make sure that records of individual financial transactions are accurate and up-to-date.
Why Bookkeeping for Small Business is Important
Producing financial statements is much easier and faster when you have a better data-recording model. You will have a much easier time conducting an audit than you would if your accounts are messy, disorganized or even slightly outdated. Here are a few reasons why bookkeeping is so important for small businesses:
-
Separating business and personal finances ensures that you’re not personally held liable for any debts or issues related to your business.
-
Identifying mistakes early by managing transactions and reconciliation avoids financial issues later on.
-
Simplifying business finances by streamlining tax processes and working with tax professionals can save money.
-
Keeping an eye on business financial health identifies ways to improve or change processes.
-
Organizing documents and records simplifies processes such as applying for a business loan or buying new equipment.
Advantages of Bookkeeping for Small Business
Although many business owners may detest bookkeeping, it is an essential aspect of running a company. It serves more than merely keeping you organized. It can aid in cost savings, business expansion, and successful business management. Here are a few advantages of bookkeeping:
1. Make things simpler for tax season
You will need current financial records outlining your income and expenses when you file your taxes. If your bookkeeping is sloppy, you’ll be searching for all your receipts and invoices around tax time. This time of year, keeping your books up to date will help you feel less stressed. Additionally, your CPA will be delighted with you!
2. Be ready in the event of an audit
You must be prepared to review financial records in the case of an audit. Finding the information you need to pass an audit will be simpler if your recordkeeping system is effective and accurate. You might have to pay more taxes and penalty costs if you can’t support an audit with sufficient proof.
3. Monitor your cash flow
It’s crucial for business owners to monitor the money entering and leaving their accounts. By using good bookkeeping techniques, you may see your cash flow and identify places where you can cut costs.
4. Publish financial statements
Understanding your company’s finances requires having access to financial statements including your Profit & Loss Statement, Balance Sheet, and Cash Flow Statement. You may gain an overview of how your firm is doing, check for correctness in the accounting and bookkeeping, and make future decisions regarding expenditure and tax planning by reviewing these records on a monthly or quarterly basis.
5. Detect fraud and mistakes
You may stop fraud or errors in their tracks by reconciling your books each month. To check for anomalies between your statements and what has been recorded in the books, every transaction will be fully accounted for.
These are but a few advantages that bookkeeping can provide to your company. Consider hiring a bookkeeper if you don’t want to handle the bookkeeping yourself. This may be a cost-effective and effective technique to maintain order in your books. Call us at (360) 756-5020 to begin right away.
How to Manage Bookkeeping for Small Business
There are two ways to perform bookkeeping for your small business:
1. Manage your own small-business bookkeeping
If you run a very small business, You can also hire a bookkeeper to work directly for your business.
Bringing a part-time or full-time professional into your business gives you access to their expertise and allows them to become more familiar with your business’s finances, processes and accounting tools and software.
However, it’s important to note that your bookkeeper won’t be the only person working on your business finances. So you’ll want to understand which tasks your bookkeeper is and isn’t responsible for handling.
Remember, managing your own bookkeeping means you’re in charge of keeping your finances in order, storing records and creating necessary statements.
2. Use an online Bookkeeping Service for Small Business
Outsourcing your bookkeeping is another option, find the best virtual bookkeeping service that can help you get the process started.
With this type of service, you can communicate completely by email or phone without having to worry about meeting in person. The responsibilities handled by a service will depend on the provider.
How to find Bookkeeping Service for Small Business
If you want to outsource your small-business bookkeeping, there are several ways to find experienced bookkeepers.
Referrals
Consider asking for a referral from someone you trust. If you work with a certified public accountant, business lawyer or tax advisor, ask if they have recommendations for a bookkeeper or bookkeeping service.
Searching online
You can also search for professionals or bookkeeping services online. To find reliable options, look through your accounting software’s directory of certified bookkeeping professionals.
Or You can Contact us for Reliable Bookkeeping Services
Statewide Business Accounting specialize in business accountancy services for businesses of all size, structure and industries. With over 30 years’ experience, our expert staff can help you to set up, manage, report and meet compliance requirements.
We are certified practicing accountants (CPA) and have been servicing the Brisbane inner south suburbs of Coorparoo, East Brisbane, Norman Park, Morningside, Cannon Hill, Camp Hill, Carina, Holland Park, Annerley and Greenslopes areas for over 30 years.