Tag: bookkeeping services

Why It’s Important to Have Your Bookkeeper Close the Annual Books

March 13, 2025by Anna FaulkLeave a comment

As the year comes to a close, businesses must ensure their financial records are properly finalized. One crucial step in this process is the formal closure of the annual books by a bookkeeper. This essential practice not only maintains financial accuracy but also helps in compliance, decision-making, and strategic planning. But what exactly does closing the books involve, and why is it so important? Let’s explore the key aspects of this process.

What Does Closing the Books Involve?

Closing the annual books is a systematic process that ensures all financial transactions for the fiscal year are accurately recorded and reconciled. This involves several critical steps:

Reviewing Transactions: Bookkeepers go through the entire year’s financial records to verify that all transactions—revenues, expenses, assets, and liabilities—are recorded correctly.
Reconciling Accounts: Bank statements, credit card statements, and other financial records must be reconciled to ensure there are no discrepancies between what is recorded in the books and actual financial activity.
Reconciling Payroll and Sales Tax Accounts: Payroll liabilities and sales tax payable accounts must be reviewed and reconciled to ensure all obligations have been met and recorded correctly.
Adjusting Entries: Accruals, interest expenses, prepaid expenses, and other necessary adjustments are recorded to reflect accurate financial positioning.
Generating Financial Statements: Once accounts are reviewed and reconciled, the bookkeeper generates key financial reports, such as the income statement, balance sheet, and cash flow statement, to provide a clear picture of the business’s financial health.
Reviewing for Errors and Compliance: Any inconsistencies, duplicate transactions, or missing records are identified and corrected to ensure compliance with tax regulations and accounting standards.
Client Book Review: The bookkeeper conducts a final review with the client to ensure all necessary documents are included, outstanding questions are addressed, and any last-minute adjustments can be made before officially closing the books.
CPA Final Adjustments: The CPA will provide any final adjusting entries, including depreciation, to ensure financial statements reflect accurate tax and accounting treatments.
Closing Temporary Accounts: Revenue and expense accounts are closed, transferring net profit or loss into the retained earnings account, resetting them for the new financial year.

Why Is Closing the Annual Books Important?

1. Ensures Financial Accuracy

By closing the books properly, businesses eliminate errors that could impact financial reporting. This helps ensure that all transactions from the previous year are accounted for correctly and that opening balances for the new year are accurate.

2. Facilitates Tax Preparation and Compliance

A well-maintained and closed set of books simplifies tax filings and ensures compliance with IRS regulations. Accurate financial records help minimize the risk of audits and penalties associated with incorrect tax filings.

3. Provides Insightful Financial Analysis

Closing the books provides a clear and complete financial picture, allowing business owners and management to analyze profitability, expenses, and cash flow trends, which can inform better decision-making.

4. Supports Strategic Planning

With properly closed books, businesses can create reliable budgets and forecasts for the coming year. This allows for more effective financial planning and helps set realistic goals based on accurate data.

5. Improves Investor and Lender Confidence

Investors, lenders, and other stakeholders rely on accurate financial statements to assess a company’s performance and financial health. A well-closed financial year reassures them that the company maintains sound financial practices.

6. Prepares for External Audits

If a business undergoes an audit, either by choice or necessity, properly closed books make the process much smoother. Having organized financial records ensures that all necessary documentation is readily available.

Conclusion

Closing the annual books is not just an administrative task—it is a fundamental practice for financial integrity, compliance, and business growth. A professional bookkeeper ensures that this process is handled efficiently, setting the stage for a strong financial start to the new year. Investing time and effort into this process can prevent costly errors, reduce stress during tax season, and provide valuable insights for future success.

Remember that the CPA provides the final end-of-year adjustments. Bookkeepers record financial transactions in the books, while CPAs apply tax law to those records. These transactions include items like depreciation, which is a tax adjustment, not an actual bank transaction.

How to Get Paid Faster: A Guide to Accounts Receivable

June 19, 2023June 20, 2023by Anna FaulkLeave a comment

As a small business owner, you know that cash flow is key. Without cash, you can’t pay your vendors, staff, or yourself. But sometimes it feels like getting customers to actually pay what they owe is an uphill battle. That’s where accounts receivable come in! Don’t worry if you don’t know what it is – we’re about to break it down for you.

What is Accounts Receivable?

Accounts receivable (AR) is the money that customers owe a business for goods and services provided but not yet paid for. It can also refer to the process of tracking how much each customer owes and how much has been paid off. AR falls under the umbrella of financial management and plays a major role in your company’s overall financial health.

How Can You Generate Faster Cash Flow?

Generating faster cash flow involves making sure that customers are paying their invoices quickly and accurately. Here are some tips on how to do just that:

1. Offer discounts for early payment

This provides an incentive for customers to pay their bills on time or even early!

2. Make sure your invoices are clear and easy to understand.

Include due dates, itemized lists of products/services, payment methods accepted, etc. This will help avoid confusion or miscommunication down the line and ensure that payments get made in a timely manner.

3. Automate reminders.

Automated text messages or emails can remind customers when payments are due or remind them of any discounts they may receive if they pay early. Automation saves time and ensures more reliable communication with customers so that payments get made promptly!

4. Use online payment portals.

Online payment portals make it easier for customers to pay their bills quickly and securely without having to mail in checks or other forms of payments manually.

5. Offer multiple ways for customers to pay.

Accept credit cards, e-checks, direct debit, check by phone, PayPal, Venmo, etc. Allowing multiple forms of payment makes it easier for customers to pay their bills on time !

6. Streamline Collection Process

Streamlining your collection process includes tracking invoices sent out as well as payments received so that nothing slips through the cracks. This helps ensure that all outstanding accounts are being tracked accurately and consistently.

7. Implement Automated Credit Control Systems

Automated credit control systems allow businesses to automate tasks like sending out reminder emails/texts or automated follow-ups when invoices remain unpaid after a certain period of time has passed. This helps keep track of all accounts receivable efficiently without having someone manually monitor them every day which saves time and resources!

8. Follow Up On Late Payments Immediately.

Following up on late payments immediately shows your clients that you take their commitments seriously by providing prompt responses when necessary. Prompt responses help ensure quicker resolution times which can result in faster cash flow!

Accounts receivables play an important role in managing a business’s overall financial health as well as its ability to generate faster cash flow – but it doesn’t have to be tedious or overwhelming! By following these tips you’ll be able to manage your AR more efficiently while still providing excellent customer service throughout the process! So put them into action today – let’s get those invoices paid faster! Contact us if you’d like help managing your accounts receivables.

An Overview of the Colorado Secure Savings Act: Employer Responsibilities

May 25, 2023May 26, 2023by Anna FaulkLeave a comment

If your business is in Colorado AND you have payroll (even if your payroll is only for yourself), PLEASE READ THIS ARTICLE!

The Colorado Secure Savings Act, signed into law in May 2021, requires Colorado-based employers with at least five employees to offer a retirement savings program to their workers.

****Regardless of the number of employees you have, this Act REQUIRES ACTION****

If Incline Business Essentials provides payroll services to your company, we have you on our list to assist. If your payroll services are provided by a CPA or other outside company, please coordinate with us if you need assistance.

BUSINESSES WITH FEWER THAN 5 EMPLOYEES

If your business has fewer than five employees, you will receive a PIN number from the State of Colorado. You will receive this via a letter/postcard AND/OR via email. This PIN is necessary to officially notify the state that your business is exempt. Please be on the lookout for this PIN and forward it to your bookkeeper.
If Incline handles your payroll, Incline Business Essentials will ensure that you are registered as an exempt business with the State of Colorado. Incline will bill you accordingly for this additional work. If you have an outside payroll provider (CPA or other), please please coordinate with us if you need help setting this up.
If you hire additional employees and reach the 5-employee threshold, PLEASE, PLEASE let us know. We cannot ensure your compliance unless you communicate these changes to us.

BUSINESSES WITH 5 OR MORE EMPLOYEES

Do you already offer an acceptable employee savings plan? Please read the applicable category below:

If your business has five or more employees and you already HAVE an acceptable savings program set up for your employees:

You will receive a PIN number from the State of Colorado. You will receive this via a letter/postcard AND/OR via email. This PIN is necessary to officially notify the state that your business is exempt. Please be on the lookout for this PIN and forward it to your bookkeeper.

If your business has five or more employees and you do NOT already offer an acceptable savings program:

You are required by law to offer the Colorado Secure Savings program. What does this mean for you?

We will need to create an online account/portal for the Secure Savings Act. You will receive a PIN number from the State of Colorado. You will receive this via a letter/postcard AND/OR via email. This PIN is necessary to set up the required online portal. Please be on the lookout for this PIN and forward it to your bookkeeper. Incline will handle the setup and will bill you accordingly. We MUST HAVE THE PIN from you. Please send this to us no later than June 10th.
Important: YOUR EMPLOYEES WILL AUTOMATICALLY BE SET UP FOR THIS PROGRAM. This is an “opt-out” program. Your employees will receive an email with opt-out instructions. This will come directly from the state after we create your online business profile. It is YOUR EMPLOYEE’S RESPONSIBILITY TO “OPT-OUT” IF THEY CHOOSE NOT TO PARTICIPATE. Incline cannot Opt-Out for your employee. You cannot opt-out for your employee. Your employee must complete this opt-out process. Otherwise, 5% of their gross earnings will be automatically withheld from their paycheck to be placed into a savings account.
Each pay period, Incline Business Essentials will log into the portal with the state and make the appropriate payments into the employee savings accounts.
Incline Business Essentials will be billing accordingly for this work.

TO HELP YOUR EMPLOYEES “OPT OUT”

Incline cannot opt your employees out. The employee must opt out of the program themselves OR they will AUTOMATICALLY have 5% of their gross payroll withheld. If they do not opt-out and funds are withheld, your employee will have to access their funds directly from the state. Incline cannot assist you with withdrawing funds from Colorado Secure Savings.

Your employee should receive an email from the state with opt-out instructions.
If no email is received, please direct your employee to: https://coloradosecuresavings.com/

To our knowledge, this is the only way to opt out of the program. If you have employees who may not be able to navigate the opt-out, we recommend that you sit at a computer or device and help them through the process. While it is the employee’s responsibility, as the employer, it is your legal responsibility to inform your employee and ensure that your employees understand this will be happening.

Important Reminder:

Incline Business Essentials is NOT an HR company. It is your responsibility to notify your employees in accordance with the Colorado Law. For full details, visit the Colorado Secure Savings website. If you are a Gusto or QBO payroll client, we can connect you with Gusto/QBO HR services if you need things like employee handbooks, etc.

For more information about the Employer Responsibilities, please refer to: https://coloradosecuresavings.com/employers/program-details

Incline is here to help. If you have any questions, please do not hesitate to reach out. If we don’t know the answer, we will do our best to help find the answer. Reminder that we will be billing for our services in setting up these systems.

Balance Sheet Basics – What Assets Can You Expect to See?

April 25, 2023by Anna FaulkLeave a comment

A balance sheet is an essential financial document that provides a snapshot of your business’s assets, liabilities, and equity. It serves as a way to track the health of your company by revealing how much money you have coming in and how much money you are spending. But what exactly do all of those assets mean? Let’s take a look!

What are Assets?

Assets are items that have value and can be owned or controlled to produce value. On a balance sheet, they can represent anything from cash to accounts receivable. They can also include tangible items such as machinery and equipment, real estate, vehicles, furniture, inventory, and buildings.

Examples of Assets

Cash

This includes both physical cash on hand as well as funds held in bank accounts or other liquid investments. Cash is important for day-to-day operations because it allows businesses to pay bills, purchase supplies, and make payroll.

Account Receivables

These are payments owed by customers who have purchased goods or services from your business but have yet to pay for them. Accounts receivable is an important asset because it reflects future revenue that has not yet been recognized in the current period.

Investments – Investments include stocks, bonds, mutual funds, etc., which may be held for investment purposes or income generation. Holding investments helps diversify risk within a portfolio and potentially generate returns over time.

Equipment

Equipment refers to any machinery or tools used in order to run the business such as computers, desks, printers, vehicles, and more. Equipment is important because it enables the business to carry out its operations efficiently.

Inventory

This includes any products or materials that are held for sale by the company. Inventory must be tracked closely in order for a business to maintain healthy cash flow levels since selling inventory generates immediate revenue for the business.

As we can see from this quick overview of assets on a balance sheet, understanding what each asset means can help small business owners better manage their finances and stay on top of their financial goals! By familiarizing yourself with these common assets—cash accounts receivable investments equipment inventory—you will get one step closer to achieving financial success!

A Bookkeeper’s Guide to Closing Out the Books for the CPA

March 6, 2023March 6, 2023by Anna FaulkLeave a comment

If you own a small business, you might find yourself asking the age-old question: How does a bookkeeper close out the books for the CPA? It’s an important question—after all, your accountant can’t prepare your taxes without accurate and up-to-date financial statements. Fortunately, we have an answer. Let’s dive into how a bookkeeper closes out the books for the CPA.

Organizing Financial Records

The most important step in closing out the books is making sure that all financial records are organized and up-to-date. This means that all transactions must be recorded accurately, either in a physical ledger or in accounting software. It’s also important to make sure that all accounts are reconciled and any discrepancies are resolved before sending them off to your accountant. Doing this will help you avoid any potential headaches down the line when it comes time to prepare your taxes. As bookkeepers, we handle this on a regular basis throughout the year. At year-end, we complete extensive reviews to ensure accuracy.

Recording Adjusting Entries

Once bookkeepers have ensured that all of your financial records are in order, it’s time to record any necessary adjusting entries in order to ensure accuracy. This includes recording accruals such as unpaid wages, prepaid expenses, and accrued income. Interest on loans must be recorded and reconciled. Payroll reconciliations involve ensuring that the payroll recorded in the books matches the quarterly and annual reports provided to the state and IRS. Double-checking that the Accounts Receivable and Accounts Payable are accurate is another step to confirming that the books can be closed out accurately. These entries must be made prior to closing out the period so that they can be accurately reflected on the financial statements sent to the accountant.

Closing Out Accounts

The final step is closing out any accounts that need to be closed for tax purposes or other reasons. This involves transferring any balance from one account to another (e.g., from a current asset account such as Cash to an income account such as Revenue). This ensures that all accounts reflect their correct balances as of the end of the fiscal year or period being closed out for review by your accountant or auditor.

Closing out books for a CPA can seem daunting at first glance but it doesn’t have to be! With careful organization and attention to detail, we can close out your books before sending them off for review by their CPAs or auditors. By following these steps—organizing financial records, recording adjusting entries, and closing out accounts—you can rest assured knowing we are well on our way towards preparing accurate financial statements for review by your CPAs.

What is a Profit and Loss Statement?

December 8, 2022by Jaclyn SimmonsLeave a comment

There are 3 main financial measures that provide you, the business owner, with the financial health of your company:

Profit and Loss
Balance Sheet
Cash Flow Statement

Income Statement

Today we are going to take a deeper look at the Profit and Loss, otherwise known as the Income Statement. In a nutshell, the Profit and Loss shows you if your business is making money or not. The Profit and Loss shows you the summary of your revenue or income in relation to your expenses over a period of time.

Your income for your business is the money you are making from your clients. You are charging your clients for a product or a service that your business provides. Maybe you are providing ski lessons and charging your clients for your expertise. Maybe you are making delicious cookies and selling cookies to your clients. Either way, the money you are generating is your income or otherwise known as your revenue.

On the flip side, your business is spending money. You have to purchase your raw materials or pay for software. Maybe you are buying chocolate chips for cookies. Maybe you need software so that clients can book a lesson. You will have insurance for your business. You might have utilities or rent. Perhaps you are paying for labor. Whatever those expenses might be, it is important to know what you are spending, especially in relation to your revenue.

Net Profit

Your net profit is the difference between your income/revenue and your expenses. Your business is profitable…in other words, you are MAKING money if your income is more than your expenses. This is where you want to be. On the other hand, you are at a LOSS if your expenses are more than your income. You won’t know if you are in that position unless you are keeping an accurate set of books.

As a business owner, you MUST know this about your business. You have to know if you are profitable or not in order to make decisions about your business.

The Profit and Loss is a measure of your business over time. We can look at your Profit and Loss for a month at a time, a quarter at a time, or for a full year. Larger periods of time give you important big-picture information. Smaller periods of time might show you that in April your expenses are very high compared to your income. Maybe you have software subscriptions that get renewed in April. Or you might see that in October your revenue drops. No one is skiing in October. Can you figure out how to make some passive income in October or offer specials for the upcoming season? Those types of analytics help you make changes or adjustments in your business so that you can cover seasonality or patterns.

Now let’s talk a little more in-depth about the types of revenue and expenses.

Categorize Revenue and Expenses

For a small business, the revenue is typically fairly easy to categorize. You might be an electrician so you are providing a service and selling parts. You can group all of your sales into one category and simply call it sales. Or you might want to break it into two categories:

Services
Sales of Product

This would give you additional detail about how your business is making money. These should be big-picture categories.

Expenses are a little more complicated because you need to categorize these based on tax rules in order to consider them deductions.

These categories can include items like:

rent
insurance
subscriptions
utilities
payroll/labor
gas
raw material costs
cost of goods
etc.

These must be carefully categorized to fully take advantage of your allowed deductions…a topic for another day but just remember, categorizing your expenses will save you in taxes.

Remember, regardless of how many categories you have, your total INCOME/REVENUE minus your total EXPENSES will determine your profitability.

Make Good Business Decisions

In a nutshell, are you making money? Is your business in the red or in the black? I like to tell my clients, while you might love what you’re doing if you’re not making money, then this is just a hobby. You better REALLY love your hobby if you’re willing to lose money! It is important that you know if you are making money or not. If you’re losing money, you might throw in the towel and read a good book…

If you are making money, how can you maximize your revenue? How can you minimize the time you spend working in the business by hiring appropriately? How can you determine when you should buy that new piece of equipment your business needs?

Your profit and loss or income statement can help you steer your company into a path of success. Questions? Feel free to contact us!

Tips for Avoiding an Audit

November 16, 2022January 24, 2023by Anna FaulkLeave a comment

No one wants to go through an audit. Just the word “audit” forms a pit in your stomach and causes you to cringe. Audits are time-consuming and costly.

Avoiding an audit should be a concern of any business owner. While there’s no way to guarantee you won’t be audited, there are steps you can take to avoid triggering an audit.

9 Things to Do to Avoid an Audit

1. First and foremost, PAY YOUR TAXES!

Make quarterly estimated tax payments and always be sure to pay your payroll taxes. File your annual taxes on time and make your tax payments.

2. Issue 1099s and W2s on time.

These are both required to be filed and remitted to employees/contractors no later than January 31. Filing these late is a red flag to the IRS.

3. Don’t mix business and personal.

Many small business owners try to deduct travel, vehicles, cell phones, etc that are not truly business. While some of these might be legitimate business deductions, be sure you understand the rules surrounding these “fuzzy” deductions.

4. Pay officers/owners a reasonable salary.

Do not inflate salaries for officers or owners of small businesses. Inflated salaries will trigger the IRS to take a closer look. On the flip side, low salaries for business owners are also a red flag. The IRS requires that business owners pay themselves a “reasonable” salary for their work in the business. Your CPA should help you decide what “reasonable” looks like for your business.

5. Be very careful of travel and meals.

Only true business travel and meals should be deducted. This is a hot topic for the IRS. Excessiveness in this area will trigger an audit.

6. Only deduct your home office if you meet the criteria.

This is a particular topic that the IRS will focus on. Remember that your home office must be a dedicated space that is used exclusively for business. A dining room table does not qualify.

7. Do not show a loss year after year.

This becomes a yellow flag if you continue to show a loss for multiple years in a row.

8. Be very careful of treating labor as a contractor vs. an employee.

If you are paying people with 1099 wages as a contractor but they should be considered an employee, you are sending flags to the IRS and to your State tax agencies.

9. Keep a clear, accurate, and timely set of books.

Use bookkeeping software and ideally, a professional bookkeeping and financial services provider.

While there is NO guarantee that you will not be audited, following the above guidelines will help. Keep your business running smoothly by taking steps to avoid the disruption of an audit.

7 Financial Must-Dos for Small Businesses

October 18, 2022October 18, 2022by Jaclyn SimmonsLeave a comment

If you own a business or are planning to start a small business, these are the essential practices to ensure that you are financially responsible. These steps will set your business up for success.

1. Obtain an EIN number:

An EIN number is essentially a social security number for your business. By obtaining an EIN number, you are creating a level of separation between you personally and your business. You will need to provide your EIN number to others as you do business. This way, you are protecting your Social Security number and preventing identity theft.You can contact a professional to help you, or if you are comfortable, you can set this up by navigating the IRS website.

2. Open a bank account in the business name

Open a business bank account. Deposit all your income into this account and pay for all of your expenses from the business bank account. This will ensure that your bookkeeping is simple and accurate. It legitimizes your business. It captures your income and expenses for tracking profitability and preparing for taxes.

3. Form relationships with professionals

Every small business should have relationships with professionals who will help ensure the success of the business. These relationships include: lawyer, CPA, bookkeeper and insurance agent at the very least. You will likely also need an IT specialist and a banker. Forming these relationships and hiring the right professionals will foster the growth and success of your business.

4. Do your books

We cannot stress that you must have a bookkeeping system in place. You need to do your books yourself in a timely and accurate manner OR outsource your bookkeeping. This is the core measure of the financial stability of your business. It will help you make decisions about your company. Without an accurate set of books, you cannot file taxes, cannot obtain business financing, and you cannot make informed decisions about your business. We recommend that you use a professional. You might want to do this yourself as a business owner and you might have the skills to do so. As a business owner, you will wear many hats, you will be pulled in a lot of directions and books tend to be put to the bottom of your to do list. Outsourcing them is a great option.

5. Pay your estimated taxes/payroll taxes

Stay on the good side of the IRS by paying your taxes. Keep yourself out of trouble with the IRS and prevent yourself from needing to come up with a lump sum when you file your taxes. It is difficult. We get it. Cash flow is an issue and paying taxes is the last thing anyone wants to do. But you won’t do yourself any favors by skipping these payments. You will need an accurate set of books to determine how much to pay on a quarterly basis.

6. Track your profit

You may have started your business because you have a hobby that you’ve turned into a business. But to stay in business, you must be profitable. Track your profitability by having a bookkeeping process in place and operating.

7. Keep your receipts

You must keep your receipts. Many business owners believe that your bank/credit card statement is sufficient. It is not. If you are audited, the IRS will want to see actual receipts or electronic copies of receipts. We recommend that you store receipts electronically.

Follow these practices to help ensure the financial health of your small business. Bookkeeping and Financial Service Providers such as Incline Business Essentials can help you with these steps.

Why You Need Bookkeeping

September 20, 2022September 29, 2022by Anna FaulkLeave a comment

If you run a business, the act of bookkeeping is essential. Let’s start by defining bookkeeping. What exactly is “Bookkeeping?”

Bookkeeping is the process of recording the financial transactions of your company. Bookkeeping categorizes the money coming into your business as income. Expenses refer to money that your business spends in order to operate. The act of bookkeeping organizes your expenses into categories that are used to file your taxes.

Now let’s talk about why this matters.

File Your Taxes

As a business owner, you will likely hire a CPA to file your taxes. You will need to provide the CPA with your income and your expenses. Your taxes cannot be filed without this information. This leads to the next important reason for keeping an accurate set of books.

Pay Fewer Taxes

This is probably the most attractive reason to have a bookkeeping system in place. Bookkeeping identifies all of your transactions so that nothing slips through the cracks. You must categorize each and every transaction that goes through your bank account. By keeping an accurate set of books, you will know exactly what you spend on gas or office supplies, or advertising. When you are gathering your data at the end of the year, you aren’t trying to remember how much you spent on that new computer or which client you took to lunch in May. Without a clear bookkeeping system, you will invariably miss out on deductions. You must have a plan and a process to ensure that deductions are captured.

Your expenses must be organized into categories approved by the IRS in order to be considered “deductions”. Without deductions, you will pay taxes on the entire income of your business. With deductions, you will rightfully cut this tax bill thereby saving you and your business money. For example, if your business brings in $100,000 without deductions, you might pay the IRS upwards of $25,000. But, if you can clearly show business expenses of $60,000, you might pay $10,000. This is a tax savings of $15K — not just nickels and dimes!

Track Your Profit

Profit is a key indicator of your business’s success. You can only determine your profitability if you are tracking your income and expenses.

Make Decisions About Your Business

Bookkeeping can help you make decisions about your business. Is it a good time to hire? Should you be increasing your prices? Are you spending too much on utilities? These decisions are guided by your business’s financial health.

Financing

In order to get financing for your business, you will need to provide the lender a set of books showing your income and expenses. Banks will require you to show your expenses vs. your revenue, otherwise known as your Income Statement or Profit and Loss. Bookkeeping will provide this report.

Catch Mistakes

Were you overcharged or charged twice for a service? Are you paying for a subscription that you are no longer using? You will catch these transactions through your bookkeeping because you are looking closely at every transaction.

Where Is Your Money Going?

Through bookkeeping, you will understand where your money is going. This will help you budget and plan cash flow for the development of your business.

Bookkeeping will save you money by saving on taxes, cutting down on mistakes, guiding you through financial decisions, and improving your cash flow. Business owners often want to do this on their own. Sometimes this works. But often the books are the piece of the business that well-intentioned owners plan to do and just don’t have enough time in the day.

Bookkeeping is essential but it does take time, pulling you away from your actual business and preventing you from focusing on your clients. As a business owner, you wear so many hats. This is one that you can easily outsource with confidence. Reach out for a complementary consultation to see if our services would be a good fit for your business.

What Is Bookkeeping?

March 10, 2022by Anna Faulk2 Comments

In the simplest terms, bookkeeping is the act of recording every single financial transaction related to a business. This is the bare bones necessity to having financial records prepared for tax filing purposes. Bookkeeping organizes your expenses into categories that are needed for tax filing. For example, all purchases related to office supplies are categorized so that a total spent on these items can be recorded as business deductions on the tax return.

In real business, bookkeeping is so much more than described above. Bookkeeping services will vary depending on the nature of your business. Here are some of the primary services that a bookkeeper might handle.

Primary Bookkeeping Services

Track the bank accounts and credit card accounts to ensure that every transaction is captured accurately.
Track payables and might be responsible for ensuring that bills are paid
Invoice your customers and track receivables
Payroll
Sales Tax
Collecting W-9s from vendors
Provide cash flow reporting
Assist with budget creation
Quarterly tax coordination with CPA
Receipt Management
Act as a liaison between you and your CPA

Bookkeeping is essential in the overall health of your business. Bookkeeping services ensure that you have the information needed to make decisions about your business. Your books are maintained properly to avoid mistakes and missed deadlines. Proper bookkeeping will help you understand your cash flow. Financial reports will be ready for your CPA.

In summary, a bookkeeper will save you time and money while reducing stress on business owners. The success of your business depends on high quality bookkeeping.