How Important are Bookkeeping Services For Businesses?
The term accounting is covering a broad spectrum of services. Accounting is defined as production of the business’ financial records and principles of accounting are applied to finance, accounting, auditing and bookkeeping. Accounting originated in Mesopotamia actually in which people are using accounting methods to be able to record the growth of their herds and crops. And a thousand years later, it becomes more complex and sophisticated system that we’re using today to meet the needs of governments, financial institutions and businesses.
So what actually makes accounting and bookkeeping 2 different services despite the fact that both are concerned in dealing with the finances of the company? That is exactly where these 2 end their similarities because bookkeepers serve the foundation in creating good audit trail of the daily financial operations that the company has.
As for the activities it can basically be anything from recording daily financial transactions of a business, setting up sound financial filing system based on the set standards of a single or double entry bookkeeping, assist in building solid financial team for the business from accountants, payroll preparation firms etc., categorization for preparation and reviewing data to hand over to the accountant or accounting department of the business, providing the business owner cost and cash flow information which helps them support and grow the business, recording daily financial transactions of a business, and reconciling cash accounts and bringing ledges to trial balance stage.
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Accountants are taking the information that the bookkeepers have provided them. Once they have the information, they are going to make reports and do analysis of it to be able to help the business get financing, plan for the future, put a value on their business and prepare for tax the tax reporting. The phrase accountant is actually a French word “compter” meaning to score or count.
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It is the accountants that are helping business owners in making decisions of what company they like to establish from corporation, LLC, partnership, sole proprietorship and the likes. Some other accounting services that’ll be required by the business to manage their finances properly are tax preparation, forensic accounting, cost accountants and business valuation.
Making use of bookkeeping service on a regular basis is a vital step for their success for a number of small business owners. This will give them strong foundation and save money as well in the long run. These days, there are many businesses that have opted to do bookkeeping on their own using software or spreadsheet system. There’s nothing wrong with this so long as proper training is provided to have basic understanding of bookkeeping as well as the software’s function.