If you’re a small business owner, staying on top of your finances and keeping proper records is critical to reaching success. Bookkeeping services can assist you with this task.
A bookkeeper may manage your revenue and spending, reconcile your bank transactions, control invoicing, and provide financial reports. This data assists in monitoring the company’s financial health and making informed decisions about budgeting and optimizations.
Check out our article if you’re still not convinced to use professional bookkeeping services. Let us explore the main dedicated bookkeeper tasks and benefits for you as a business owner.
Save time and money
It’s unlikely that you have experience or skills in bookkeeping, so it takes a lot of time to do it on your own. Bookkeeping requires managing accounts receivable and accounts payable, completing data entry, keeping records for proper tax filing, etc. Overall, the bookkeeper is responsible for the following type of work:
- Record daily financial transactions and finish the posting procedures.
- Bring the books up to trial balance.
- Add data, keep records, and create reports and financial statements.
- Control invoicing and cash flow.
- Check that all transactions are documented: amount, date, suppliers, and customers in general ledgers.
- Perform partial verifications of the posting procedure.
- Fill out tax forms (during the tax season or quarterly, depending on the business).
- Control accounts receivable and payable.
- Take care of payroll.
These tedious tasks reduce the valuable time necessary to complete other critical duties. Outsourcing accounting and bookkeeping tasks free up time to boost your business, find new clients or investors, etc. That’s one of the main reasons to consider using professional bookkeeping services.
Tax and auditing benefits
The last thing a business owner wants is to deal with the IRS due to improper tax filing. The IRS officer won’t accept a lack of experience as an excuse for making mistakes and failing to file taxes.
Even though bookkeepers may not have the power to file taxes (it’s the accountant’s task), they keep books properly, so it’s easier to prepare for the tax season. Moreover, even though most businesses rarely undergo audits, it’s a possible option. You want to have your books in order in case of an audit.
Another thing to understand is that small businesses have more reimbursement options than they think. Business owners may benefit from specific exemptions in the tax system for small enterprises.
However, you can benefit from tax deductions and write-offs, but only if you preserve all necessary receipts and documents. Keeping your receipts in a drawer is simple, but it will cost your company significantly more time and money in the years to come if you don’t know how to use these documents for the company’s benefit.
Keeping proper financial records is time-intensive and small mistakes can be costly. BooksTime makes sure your numbers are 100% accurate so you can focus on growing your business.
Valuable insights into a business
Even though you may think a business is doing great and bringing profit, the bigger picture may be entirely different. It’s impossible to tell how successfully the company operates without proper bookkeeping.
A different pair of eyes looking at the company offers a great insight into a business. The bookkeeping expert may generate detailed reports showing how much a business earns and spends.
Thus, you can cut expenditures whenever necessary and focus on investing money into areas requiring attention. Moreover, you won’t have to guess which areas to support. Based on the reports, it’s easy to tell which business areas bring the most profit.
Attract the investors’ and lenders’ attention
If a business owner can’t keep good financial records of the company, lending possibilities for this organization will become limited. Banks and other financial institutions lend money to firms with solid financial health and a track record of success. In such circumstances, the alternative will be a loan with high-interest rates, leading to more expenditures and lost opportunities.
The same rule applies when the company owner wants to get investors’ money. They won’t be interested in the project if they can’t read the documents. An investor wants to get the maximum out of the investment, and unorganized books prove that the business owner may not have the necessary skills to make a profit.
Besides working with numbers and reports, accountants help owners with challenging aspects of business performance. Also, they have enough knowledge to assist in financial strategic planning and budgeting.
Bookkeepers are trained in finance, so they can help identify aspects that help to grow the company by checking key performance indicators. The expert can also help monitor these indicators to spot opportunities and prevent risky solutions. Moreover, bookkeepers help deal with financial issues, such as debt, low cash flow, etc.
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Author: Charles Lutwidge