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
- 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.