Keeping tabs on your finances can be a challenge, but they can also be very rewarding. Keeping accurate records of expenditures and income is the best way to keep tabs on your money. The process of maintaining the records is called bookkeeping, and you can manage the process either by hiring an in-house team or outsourcing to a third party. With the right services, you can have everything taken care of so that you don’t have to think about it. These services come in many forms, from simple bookkeeping services to full-fledged financial planning services. What type of bookkeeping service you choose depends on the needs of your business, your budget, etc. This guide will highlight some of the most common bookkeeping services a service provider offers and their benefits. Let us read further to know more.
What is a bookkeeping service?
A bookkeeping service is a service provided by a third party that keeps track of your financial records. These companies help you stay on top of your finances and keep track of income and expenditure. You can hire a company to track your income, expenditure, debt and assets, or you can use a bookkeeping services provider that will help you file your taxes and keep track of your business’s income and expenses.
Why choose a bookkeeping service?
There are many benefits to choosing a bookkeeping services provider over keeping tabs on your finances on your own. These include:
- Ease of use – Many services are user-friendly and are available throughout the day. You can use the service anytime or at night; you don’t have to be in a stress-filled office.
- No-hassle business process – Most bookkeeping services will help you file your taxes and keep track of your finances, which is a quick and easy process. This will help you save time and reduce stress.
- Maintain control – By using a bookkeeping service, you can maintain control over your finances. You can decide how your finances are handled and who has access to your information. You can also choose which service providers to give access to your finances.
- Accurate records- As the bookkeeping services providers don’t involve themselves in any other business function and are focused only on the bookkeeping process, they ensure the accuracy of the books. The financial records are prepared faster and are more reliable.
How does a bookkeeping service work?
There are several ways a bookkeeping service works. Some services will simply take your paperwork and do the accounting for you. Others will help you file your taxes and keep track of your business’ income and expenses. Some accounting and bookkeeping service providers will even help you track your investments and manage your retirement funds.
Different types of bookkeeping services
Every business has numerous activities that combine to make the business’s operations and functioning profitable and enhance growth. If you try to manage all these activities on your own, you are bound to miss out on some fields. However, bookkeeping and accounting are business functions that you can’t afford to ignore or keep on a backtrack. It is important to stay up-to-date on a business’s financials to understand the exact financial status of your business. To keep the process simpler, faster, and updated, you can hire the help of accounting and bookkeeping services providers. These service providers offer their help with various business accounting and bookkeeping activities. Some bookkeeping services offered by these third-party service providers include:
- Accounts payable management- Accounts payable is one of the major sources of cash outflow, making it vital for you to track them diligently. The bookkeeping services track all the invoices, payments due, and payments made by your business to the vendors/ suppliers. They even set up payment reminders and keep track of early payment discounts, due dates, etc.
- Accounts receivable management- Accounts receivables are the invoices representing the amount customers owe you. It affects your business cash inflow and must be adequately managed to maintain a steady cash flow. The bookkeeping services you hire will track and record all the receivables, set payment reminders to the customers, and manage the amount collected.
- Payroll processing management- Payroll processing can be time-consuming, especially if you employ more than a few employees. It becomes even more stressful if you have additional factors such as overtime in mind and are keeping your tax information up to date. Bookkeeping services can ensure that your employees receive the correct and timely payments, either by direct deposit, physical cash, check, or some other payment form.
- Tax preparation and filing- You have to handle the hectic task of preparing your business taxes, but having a bookkeeper can relieve that pressure. Every bookkeeper and bookkeeping services provider can complete all kinds of tax preparation but use a bookkeeper who can act as a tax adviser between you and an accountant. They will provide tax statements as well as detailed tax documentation.
- Accounts reconciliation- Accounts reconciliation is an important financial activity as they ensure to erase any gaps or inconsistencies in the books of accounts. You must ensure that the balance sheet data matches the data in General Ledger and other accounts books. Your bank statement and accounting should also match; if this isn’t the case, you might have a problem. The accounting and bookkeeping services providers reconcile bank accounts monthly to ensure that your cash flow is normal and everything is recorded correctly.
- Financial statements preparation- Bookkeeping services providers also help you prepare and present your business’s financial statements and reports. The major financial statements prepared by the services provider include:
- Balance sheet
- Cash flow statement
- Income statement
Bookkeeping is the primary task of financial management for every business and, therefore, must be taken care of carefully and systematically. To streamline the process and reduce your burden, you can use bookkeeping services, in-house or outsourced. Once you decide to hire help for bookkeeping, make sure to conduct proper research and choose the best one for your business. Consider the services you need, the cost of the services, the service provider’s expertise, etc., before making a final choice.