Reliable bookkeeping is an essential process within the function of accounting.
However, there is a difference between bookkeeping services and accounting services.
Bookkeeping services are more transaction oriented. In contrast, accounting services are more about reading the data and giving insights into financial health based on bookkeeping information.
Bookkeeping refers to many different types of duties and tasks. The most important tasks involve recordkeeping and categorizing daily payments and expenses. Bookkeepers perform other duties, such as sending customer invoices and tracking who owes the business. In addition, they conduct bank reconciliations every month and generate financial statements. They can also process payroll, assist with taxes, and prepare the accountants’ books.
The accountant reviews and analyzes the financial statements. They are more subjective and usually more of an advisory role to the business owner for financial decision-making. Accountants also prepare to adjust journal entries, analyze operational costs, review cash flow, perform audits, file tax returns, and advise tax planning.
It is important to note that accounting professionals can perform both accounting and bookkeeping duties, but a bookkeeper cannot perform accounting tasks like tax filing. However, going to an accountant for your bookkeeping needs is usually not the best decision financially as an accountant will charge more than a bookkeeper for those services.
Bookkeeping Services for Small Business 2023
It is essential for small businesses to stay on top of their finances and the best way to do this is to keep the books up to date. The bookkeeping process consists of tracking and recording all the financial transactions that occur in a business. These records are used to prepare financial statements, which provide a business owner with significant information to help them make important financial decisions.
Some of the bookkeeping process can be automated with the help of bookkeeping software. Typically, if you utilize bookkeeping software, you connect your financial accounts to the software, which allows your financial transactions to be recorded automatically. Some bookkeeping software options are also able to organize those transactions into their proper journal/ledger if they are similar to transactions already organized. Once the month is up and your financial institution provides your statements, you can then reconcile the information in the software to confirm its accuracy. It is always important to check the information. Your books and reports are useless if the information is incorrect, and keep in mind, there is always the possibility of the software recording something in error.
After the data is all proved to be correct, it is time to produce the financial reports. Again, if you are utilizing bookkeeping software, this can be done with the click of a button. Bookkeeping software makes the bookkeeping process much smoother, but never underestimate the power of having a human eye confirm everything was done correctly.