Bookkeeping is necessary not just to keep track of your company’s financial status, but also to ensure regulatory compliance.
Building and maintaining bookkeeping and accounting records takes a lot of time and work. To make it easier for you to keep track of your finances, chartered accountants must offer a whole range of accounting and bookkeeping services.
What is a bookkeeping service?
The technique of recording and keeping track of your business’s financial transactions is known as bookkeeping. Your bookkeepers are required to compile financial resorts based on your company’s activity on a regular basis. These reports indicate your company’s financial situation as well as its performance.
In addition to managing financial records, bookkeeping services include:
- Tax return preparation
- Keeping track of performance indicators
- Tidying up financial records
- Keeping track of accounts owned and receivable
- Management reporting
It is crucial to note, however, that bookkeeping is not the same as accounting. The term “bookkeeping” refers to the process of keeping daily financial records. As a result, bookkeepers gather financial data from which financial statements or books of accounts are generated.
Accounting , on the other hand, refers to bookkeeper’s preparation, reporting, analysis and summarization of financial data. Accounting reports provide a glimpse of your company’s financial situation as well as its performance.
What does a bookkeeping service do?
A bookkeeper’s job is to deliver accurate, up-to-date financial data to accountants so they can compile annual financial reports and tax filings for your company.
These accounting reports are utilized by you, the business owner, as well as other stakeholders like managers, to assist them in making business choices.
Services that bookkeeper can provide:
- Data entry
Data entry is simply the process of recording financial transactions, or keeping track of what comes in and what leaves your company. Because reliable financial data is required for the preparation of financial statements, it is the cornerstone of bookkeeping and accounting services. This is because having correct financial records can assist you and other stakeholders in getting a better understanding of your organisation.
- Bank reconciliation
The practise of comparing the financial transactions in your books of accounts to the transactions reported in your bank statements is known as bank reconciliation. The goal of bank reconciliation is to ensure that the financial transactions recorded in your books of accounts match those on your bank statements. Bank reconciliation is crucial for your business since it helps you keep track of your finances.
- Accounts receivable, accounts payable and payroll
Your customers are invoiced and payments are collected on time with the help of a bookkeeper. He also makes sure that any outstanding invoices to suppliers are paid on time so that the company does not run out of cash. He makes sure that bills are paid on time to avoid any delays in deliveries or supplier credit holds.
A bookkeeper performs payroll services in addition to maintaining accounts payable and receivable. Calculating employee salaries, adjusting deductions, and ensuring that net salaries are paid to employees on time are all part of this process. Your employees will be satisfied if their salaries are paid on time.
Hiring the best bookkeeping services
A professional accountant or bookkeeping service can assist your company in staying on track with its expansion. Hiring a professional for bookkeeping allows you to focus on more important business challenges rather than accounting and auditing tasks.
When experienced bookkeepers are hired, the process will be quite accurate. However, not all bookkeepers are created equal, and not all can satisfy your needs.
You may not need to hire an in-house, full time accountant unless your company has 30 or more employees or annual revenue of several million rupees.
You now have 3 options: employ a freelancer, hire a bookkeeping firm or adopt a remote bookkeeping solution. Each of them has its own set of advantages and disadvantages which will help you decide which is the best option for you.
- Consider experience
A good accountant can act as the glue that holds the organisation together. It is critical that he or she has worked in the bookkeeping department of a company with a similar complexity and size to yours. You should look for someone who has worked in a firm at the similar stage of its lifecycle as yours.
For example, the bookkeeping needs of a 20-year-old construction firm differ significantly from those of a fast growing start up. Experienced bookkeepers will be able to plan ahead of time and anticipate any requirements. They will be conversant with your industry and its unique bookkeeping requirements.
- Ensuring proper education and training
A great bookkeeper will be well-trained and educated, as well as possess a high level of business knowledge. Though a master’s degree is not always required, it is crucial that he or she understands the business’s basic finance and accounting. Bookkeepers must be well trained and keep up with changes in accounting procedures and rules that affect their work.
- Determine technical abilities
You must utilize a software system to maintain the company’s financials and manage the books of the firm if you do not want to be locked in the twentieth century. The best bookkeepers are those that have been taught and have experience with accounting and bookkeeping software.
- Consider paying attention to the details
Bookkeepers must be meticulous in their work. They should be able to balance books and spot mistakes. They will be able to provide brief and clear financial reports that are accurate and timely.
- Extensive cash flow and credit management experience
A bookkeeper’s ability to remain on top of cash flow and predict cash flow needs is one of their most significant skills. When evaluating cash flow requirements, consider factors such as regular annual events, bonuses, taxes and business seasonality. To keep the firm stable, the bookkeeper must strike a balance between all of these demands.
- Planning and preparation of tax
Your bookkeeper should be able to plan and prepare for tax season. They must be aware of any applicable tax deadlines for items such as quarterly tax projections. For audits and tax seasons, they must know how to maintain receipts and books neatly organised.
To summarise, the best bookkeeper for your firm is one who understand and knowledgeable about your sector. By determining their skills in the given areas, one can pick the suitable bookkeeper.