Bookkeeping is the first step of the accounting process and is required for all other aspects of business accounting. Bookkeeping is the process of tracking, organizing, and recording all the financial transactions that occur daily in your business. These records are then summarized and confirmed to be accurate, then used to create the financial statements for a specific period. Bookkeeping is the data-entry aspect of the accounting process. Once the bookkeeping process is complete for a period, an accountant can analyze and interpret those records to give you advice on how to improve any aspects of the business to continue growing and be successful. They can also use those records to help you create a realistic budget for your business.
The bookkeeping records are essential when tax season rolls around, especially when you are trying to get every deduction your business is eligible for. Your accountant will need all of your financial records and reports and those records will need to be organized and accurate to be of any use. The last thing any business owner wants is problems with the IRS or to face any penalties or fees because their records are not accurate and ready to be reported.