How Important are Bookkeeping Services For Businesses?
The term accounting is covering a broad spectrum of services. The production of business’ financial records and principles of accounting are applied to finance, accounting, auditing and bookkeeping is how accounting is defined. Accounting originated in Mesopotamia actually in which people are using accounting methods to be able to record the growth of their herds and crops. Then a thousand of years later, it has evolved to a more complex and sophisticated system that we know today to meet the needs of governments, financial institutions and businesses.
So what’s actually the difference between accounting and bookkeeping despite the fact that both are concerned in dealing with the company’s finances? On the other hand, that is where their similarities end because bookkeepers are providing the foundation to create good audit trail of the daily financial operations that the company has.
These activities can be anything from 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, assist in building solid financial team for the business from accountants, payroll preparation firms etc., reconciling cash accounts and bringing ledges to trial balance stage, setting up sound financial filing system based on the set standards of a single or double entry bookkeeping and recording daily financial transactions of a business.
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Accountants are taking the information that the bookkeepers have provided them. And by the time when they have the info they need, they’ll proceed in creating reports and do analysis of it to help the business get financing, plan for the future, put a value on their business and prepare for tax the tax reporting. The term accountant comes from the French word “compter” which means to score or count.
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Accountants are also helping business owners in making decisions of what sort of company they want to create 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.
For small business owners, making use of a bookkeeping service regularly is an integral step for their success. In the long run, this will mean to have strong foundation and save money as well. These days, there are many businesses that have opted to do bookkeeping on their own using software or spreadsheet system. Well, there’s actually nothing wrong in this one so long as proper training is provided to have basic understanding of bookkeeping and the function of the software.