Why Should You Outsource Your Bookkeeping?
Why Should You Outsource Your Bookkeeping?
Bookkeeping is an essential part of every business and a good bookkeeper is even more important. Everyone needs a trustworthy person to do the job as well as someone who knows what they are doing so the owner does not need to waste time training them.
What Is Bookkeeping?
Bookkeeping involves recording a company’s financial transactions on a daily basis. With proper bookkeeping, companies can track all the information on their books to make key operating, investing, and financing decisions. It involves preparing source documents for all transactions, operations, and other events of a business. Transactions include purchases, sales, receipts, and payments by a person or an organization/corporation.
There are multiple standard methods of bookkeeping. For example, single-entry and double-entry bookkeeping systems. While these systems can be counted as real bookkeeping, any process that includes recording financial transactions is considered a bookkeeping process. A bookkeeper is a person who writes daybooks (They contain records of sales, purchases, receipts, and payments.) and documents each financial transaction whether it is cash or credit into the correct daybook. From this, the accountant can create financial reports.
What Is Single-Entry Bookkeeping?
Single-entry bookkeeping is a method that relies on a one-sided accounting entry to maintain financial information. The cash book is the primary bookkeeping record in this system. It is similar to a checking account register (Also known as a cheque account/current account in the UK.) In this, all entries are allocated among several categories of income and expense accounts.
What Is Double Entry Bookkeeping?
Double-entry bookkeeping is a method where every entry to an account requires a parallel and opposite entry to a different account. It has two equal and corresponding sides are known as debit and credit. The left side is debit, and the right side is credit. A transaction in this method always affects at least two accounts, one debit, and one credit. The number of total debits and total credits is always equal to keep the accounting equation in balance.
Why Should You Outsource Your Bookkeeping?
- Privacy:
In a business, there is always something that needs to be more guarded than internal financial records. This is information that the owner wants to keep private and secure. For this, it is important to find someone who can be trusted to do the job well, stay with the company as well as maintain confidentiality. It is not a simple task especially when a local bookkeeper knows about one’s personal financial health. - Training and Management:
Most businesses are not in the position to be able to train or manage a bookkeeping staff because their bookkeeper is likely to know more about it than they do. But outsourcing to a bookkeeping service can provide business owners with a trained bookkeeper with intensive knowledge in the service. - Maximize Your Resources:
Valuable energy and time could be wasted when a business owner tries to save money by doing their own bookkeeping or delegating it to another key employee. By outsourcing their bookkeeping services, they free themselves to spend their valuable time doing what they are more equipped to handle.
Tax and Audit-Ready Financials:
When using outsourced professional bookkeeping services, there is no concern over whether the books are accurate or questioning the integrity of the data. It makes accountants, IRS, and banking institutions happy as well.
Whether a business owner needs to provide financial statements to the bank, satisfy investor reviews or share information with the IRS, outsourced bookkeeping services help make sure there is no doubt about the data.
