The words ‘bookkeeping’ and ‘accounting’ are often used interchangeably and sometimes together. Although they seem to connote the same thing, there is a bit of difference between the two. Bookkeeping is one of several accounting processes and procedures. The term ‘accounting’ is generic and it encompasses a lot of financial aspects.
Bookkeeping has to do with daily efforts aimed at recording or keeping track of all financial dealings and transactions of a company or business venture. Proper bookkeeping affords companies the opportunity to make informed decisions as it has to do with planning and financing. By hiring an expert who offers bookkeeping services, you’d be saving your company from potential liability, loss, and to a large extent, litigation.
SmartCPA offers effective bookkeeping services. Our experts handle your financial data with professionalism, meticulousness and a high level of secrecy. Hence, you can rest assured that the details of your company’s financial dealings will not be disclosed to a third party without authorization. Without a bookkeeper, you may not know the status and details of the financial transactions that have been consummated in the company for a particular day.
Accurate bookkeeping does not only benefit you and your business, but it is also needed for use by external bodies such as investors, government, lenders, and financial institutions. For example, the government may want to enact policies based on the profitability or otherwise of companies within a particular sector of the company. It is the records from your journals, ledgers, balance sheet and trial balance that will give a pointer to the financial capabilities of your company. This information is also what informs the decision of investors and lenders. No bank or financial institution will give loans to a struggling company or an unprofitable venture.
Information from a qualified bookkeeping service provider is also what you need to be able to gauge the performance of different units and departments within the organization. From the balance sheet, you will be able to identify nonperforming units and this will help you when you are making decisions on staffing and recruitment matters.
Companies who have underestimated or undermined the relevance of bookkeeping services have paid heavily for it. This is because they are susceptible to fraud and theft. After the close of work, every penny spent and gotten must be recorded. This is what a bookkeeper does. The good thing about this is that you do not have to hire a fulltime accountant especially if your company is young and emerging. As a startup, you may not be able to afford the wages and salaries of professional accountants or certified public accountants. To cut cost and still get value, you can outsource this task to a professional firm or hire a bookkeeper. When on boarding a bookkeeper, it is important to state in clear terms the basis of accounting you want to work with whether it is the cash basis of accounting or the accrual basis of accounting. Eventually, your choice will be narrowed down to what your company is into or what you feel is best for the firm.