Bookkeeping is crucial not only to keep track of the financial status of your business but also for its legislative compliance. It takes a lot of time in creating and maintaining accounting and bookkeeping records. Thus, to help you manage your business books, you can hire accounting bookkeeping services. Let’s understand the role of bookkeeping services, what these services include, and how can your business benefit from these services. Let’s get started:
What are Bookkeeping Services?
It is essential to opt for bookkeeping for small business as it can benefit your business in many ways. Bookkeeping service includes records of business books and keeps track of all financial transactions in your business. The responsibility of bookkeepers is to summarise the entire financial activity of the business in financial reports. With the help of these reports, you will be able to know the financial situation of your business and your business’s performance as well.
Apart from maintaining financial records, the bookkeeping process includes the following tasks:
- Preparing tax returns
- Monitoring performance indicators
- Managing accounts receivable and accounts payable
- Bank reconciliation
- Analysis of cash flow statements
- Managing financial reports
However, it is important to understand the difference between bookkeeping and accounting services. Bookkeeping is all about managing daily financial records. Bookkeepers gather all the financial information by using financial statements.
On the other hand, accounting is all about preparing, analysing, reporting, and summarising financial data gathered by bookkeepers. With the help of accounting, you can get a clear picture of the financial status of your business and the performance of your business.
What tasks are included in bookkeeping services?
The bookkeeper is responsible for providing up-to-date and accurate financial data so that accountants can prepare tax returns and annual financial reports for your business. These accounting reports are beneficial for you and your stakeholders, such as managers, so they can make the right business decisions.
Take a look at the following points to know what other services can be provided by bookkeepers:
- Data Entry
Basically, data entry is considered the method of recording financial transactions and maintaining a record of what goes out and what comes into your business. Data entry is the foundation of accounting and bookkeeping services as accurate and up-to-date financial data is important for preparing financial statements. This is because up-to-date financial records will help you and your managers to have an idea of how your business is doing.
- Reconciling Bank Statements
This is the process of matching the financial transactions in your business books with the transactions in bank statements. The purpose behind this process is that the financial records in your business books must match your bank statements. By reconciling bank statements, you can identify and correct any data entry mistakes.
- Manage Accounts Payable, Accounts Receivable and Payroll Process
A bookkeeper will ensure that your clients are invoiced and payments are received from them on time. Apart from this, bookkeepers also ensure that any outstanding bills to suppliers must be paid on time without any delay.
In addition to managing accounts receivable and accounts payable, they also manage payroll processes. Payroll services include calculating the salaries of employees, managing deductions, and making sure that net salaries are paid on time to the employees.
- Monthly Financial Reports
There are numerous financial reports that bookkeepers need to prepare every month to track your business’s performance. Some of these financial reports are written below:
- Profit and loss: a statement that records expenses and earnings, and shows whether your business is making a profit or not.
- Balance sheet: a statement that shows the current financial situation of your business
- Cash flow statement: a statement that keeps track of all cash transactions and shows the amount that a business has.
- Accounts payable: a statement that shows the amount that requires to be paid to the supplier.
- Accounts receivable: a statement shows the amount that requires to be collected from the clients.
With the help of these reports, it can be determined whether your business is making a profit or not and whether it has enough cash in hand to fulfil its day-to-day operations. If all of the above-mentioned reports are not managed properly, then your business can have a negative impact.
By hiring bookkeeping services Australia, you can focus on the core functionality of your business and compliance with legislative laws. In addition to this, you will be prepared for tax season in advance and have a clear picture of your business finances. However, if you are hiring a bookkeeper for your business, then make sure to check his/her experience and knowledge. For bookkeeping services, you can also contact the Reliable Bookkeeping Services provider.