Why Small Businesses Need Bookkeeping Services
Bookkeeping Services implement a consistent financial process that strengthens your business health and provides a framework for coordinating with other departments. This helps eliminate the possibility of critical data being left in the hands of a single employee, which increases the risk of fraud and other costly errors.
Companies cannot make sound short- and long-term financial decisions without accurate books. A good bookkeeper maintains tax-ready financial statements. Contact Bookkeeping Services Atlanta for professional help.
Detailed financial statements make it easier for you and your management team to monitor the progress of your business. They can also provide insight into your future plans and help you avoid costly mistakes. For example, if you notice that your expenses are outpacing your revenue, it may be time to reduce costs or increase sales.
A bookkeeping service can help you manage the financial side of your business by recording your transactions, but they are not an accountant. An accountant is qualified to perform more in-depth analyses and offer expert advice. A certified public accountant (CPA) must pass a rigorous exam and have extensive education and experience.
When comparing bookkeeping services, consider their features and pricing. Some offer add-on services like tax preparation, payroll and HR support, while others offer their own accounting software. Some also support different accounting methods, such as cash or accrual basis. Ensure that the service you choose is compatible with your accounting method and can handle the volume of your transactions.
For example, if you are a small retail company with hundreds of customers, you’ll need a service that can process invoices. While many online bookkeeping services offer this feature, not all do. Check for additional services, such as a monthly statement and the ability to track trends over a certain period of time.
Bookkeeping services help manage the day-to-day transactions that create financial reports. This includes the recording of purchases, sales, invoices and payroll for small businesses. This information is used for financial analysis and planning. A bookkeeper also ensures that the records meet generally accepted accounting principles. This information is later taken by accountants to fulfill tax filing duties and prepare financial statements like balance sheets. If you enjoy organization and numbers, a career as a professional bookkeeper may be the right fit for you.
Online bookkeeping services can help you get started. They often provide software and bookkeeping tools, as well as support services. They can also handle payroll taxes and other specialized financial tasks. In addition, they can work with different types of accounting systems to handle varying needs. Some can even help you file your business’s quarterly reports.
The best bookkeeping service for your business depends on the size of your business and your needs. Some services are more affordable than others. Some also offer additional services, like project profitability tracking and inventory management. Those features might be useful for project-based companies. Others have more advanced CFO-level features, such as accrual basis accounting. They also integrate with NetSuite, a popular enterprise resource system for larger businesses.
Other bookkeeping services focus on the back office and include payroll duties. These services are ideal for small- and medium-sized companies that want to outsource some of their accounting responsibilities. They can also provide data entry for your business’s bank accounts, reconcile ledgers, and handle receivables and payables. They can also prepare reports for your company’s managers, such as profit and loss statements and cash flow projections.
A bookkeeper can be a valuable resource to any business. In addition to inputting transactions, reconciling accounts and preparing financial statements, they can also help you develop budgets, set goals and forecast future revenue. As the person with their finger on the pulse of a business’s finances, they are in a position to see trends and issues before others do. For example, if a client suddenly experiences a spike in sales, a bookkeeper will be able to quickly document the growth while balancing cash flow and inventory.
Likewise, if clients are not paying their invoices on time, a bookkeeper can help to track the outstanding amounts and take action to ensure that payments are made. As a result, a quality bookkeeping service can be the difference between a struggling business and one that is successful and poised for growth.
While bookkeeping and accounting are similar, they differ in focus. Bookkeeping is a more day-to-day process focused on data entry and handling transactions, while accounting goes a step further by interpreting the information to provide guidance on how best to maximize opportunities and minimize loss. A firm that offers both bookkeeping and accounting services can be a big relief to busy small business owners, who can trust that their financials are being handled by professionals with the knowledge and experience to keep businesses running smoothly.
Increased Cash Flow
Organizing financial records and translating them into reports can help businesses make informed decisions in both the short and long term. It is difficult to make business purchases, set goals or plan for the future without a clear understanding of your company’s financial status. A bookkeeper will make sure all of the data is accurate and up to date, providing the insight necessary for decision making.
Many small business owners don’t have a full-charge accountant in-house and rely on a bookkeeper to run the operations of paying bills, generating invoices, managing staff time sheets, payroll processing and financial statements at month end. While these tasks are essential, they are just one part of a complete back-office outsourcing solution that guarantees the security, scalability and success of your business.
The best online bookkeeping services will include other back-office outsourcing functions that ensure the accuracy of your books, such as a point-of-sale system, payment gateway, job-costing software and project management systems. By leveraging these tools, you can monitor your business financials in real-time and stay on top of your cash flow.
If you’re looking for the best bookkeeping service, it’s important to find someone with the professional experience and training to do the job well. You can ask for referrals from other small business owners, search online and read reviews on Google or Yelp. A good online bookkeeping service will also be able to provide you with the financial statements and reporting that you need to grow your business. And they should be able to scale with you as your business grows, transitioning into full service accounting when the time is right.
Reduced Risk of Fraud
Many small business owners put a great deal of trust in and assign significant responsibility to their bookkeeper. The problem is that when the keeper’s duties are merged with management of cash, client receivables and/or petty cash, the risk for fraud is significantly increased. This is why it is so important to separate accounting and bookkeeping responsibilities in a small business, whether by employing multiple people with distinct roles or outsourcing bookkeeping services.
One of the simplest ways to reduce your risk of fraud is to have someone other than the person who processes payroll review the checks and deposits. This does not eliminate all fraud, but it provides a valuable independent check for transactions and can act as an effective deterrent to anyone who may be thinking about stealing from the company.
Additionally, you should consider implementing an annual audit. While an audit will not uncover all fraud within a company, it does provide an opportunity for someone outside of the daily operations to take a look at your financial information and to provide a strong incentive for internal staff to keep their work honest.
Finally, you should be clear with all employees, vendors and outsourced services that any type of fraud or theft will not be tolerated. This can be conveyed verbally and with actions, such as requiring that all personnel are bonded and insured.