What Are Typical Bookkeeping Services
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If you are a business owner, you may ask: What Are Typical Bookkeeping Services? We look at the range of tasks that you can expect a bookkeeper to complete on your behalf.
What Is A Bookkeeping Service?
Bookkeeping services are an essential part of running a business. All financial transactions are recorded and documented in financial reports, and these are conducted by a professional bookkeeper.
Some small businesses choose to complete their own bookkeeping, but you will benefit from hiring a bookkeeper to complete them for you. Keeping track of your financial information isn't something to push to the side, as your monthly transactions and operating expenses need to be calculated and stored securely.
A financial report shows a profit and loss statement, cash flow, and other financial information needed to gauge your position as a business and how you can improve performance. However, that is not where bookkeeping services end, as a professional bookkeeper can also:
Prepare tax returns
Clean up books of accounts
Budgeting & Cash Flow Analysis
Cross-checking financial statements with bank statements
A good bookkeeper will tailor their services to you, as when you hire them, you're not only paying for their services but their knowledge in the industry.
Your day to day financial records are recorded and collated into a more accurate spread of information, using the best software and techniques. This allows the process of taking your bookkeeping to an accountant to become much easier, but a bookkeeper and accountant are different bodies.
The bookkeeper must complete their work before an accountant. Bookkeeping pertains to the act of providing accurate financial data of your business throughout the year so an accountant can complete tax returns etc. Most businesses of smaller sizes don't realise the potential of working with a bookkeeper, and if you're one of those, it's not too late to join in.
Here are the primary responsibilities of a book keeper and how they can benefit your business:
Basic Bookkeeping VS Full Service Accounting
Many small businesses can benefit from bookkeeping services or full accounting services, as there is a lot to manage in those early days.
As business improves and picks up, you will need more assistance with recording transactions, paying bills, payroll accuracy and more regulations you must follow, especially during tax season. At this moment, you must decide if you need basic bookkeeping services or a full service accounting would benefit you more.
The two terms are not interchangeable, as they require different levels of knowledge and qualification, and the cost of hiring an accountant compared to a bookkeeper is much higher. Bookkeeping is more about handling financial data and storing it, arguably more administrative.
Accounting is about creating forecasts from that data to help you make informed business decisions in the future. They have elements that cross over, and some accountants will offer bookkeeping services, but they are different trades, despite needing one another.
Accountants will typically carry more knowledge about taxation and business legislation, ensuring that you are on the right side of the law and complete paperwork efficiently and correctly according to HMRC.
They can advise you on your business decisions, as they can assess whether you have enough profit to bring on new staff, tax and expenses, asset management and more. The best accounting software is used to determine and calculate financial growth, evaluate your business bank account and transactions to give you a clear picture of your business future.
Accounting and bookkeeping services do go hand in hand, and bookkeeping is a large part of any accounting service, but you may not require the whole works at this current moment in time. If you do decide that processing payroll, tax audit assistance and other services do become a requirement that needs fulfilling, this can be brought in at any moment. Outsourcing bookkeeping or accounting help is easier than ever before.
What Does A Bookkeeper Do For Your Small Business?
Despite this, bookkeepers may be the first step that you need to enlist, as your small business isn't at a point where you will benefit from a full accounting service.
Your records will be well maintained, all transactions tracked and financial reports created for you. As the business head, you are juggling many different balls and wearing different hats, so being your own bookkeeper isn't ideal in many situations. A bookkeeper can also provide you with:
Entering, Coding and Bills Paid
Customer Invoices created and sent
Reconciling banks and credit accounts
Past Due Accounts Collected
Month-End Closing and Audit Support
Client Source Documents (PBCs)
Having in house bookkeeping can save you a lot of time and money, despite the initial fear that hiring one will bring. Whether you decide to outsource one or keep them in house, you can increase profits when hiring a bookkeeper.
Bookkeeping and accounting services alike shouldn't be viewed as something that will cost you money. They are more about understanding your business financial decisions and ensuring you continue to grow as a business.
If you would like to hire a bookkeeper but are unsure how much you should pay, start by assessing how many hours you currently spend on your own books and calculate how much you value that time. Once you've converted that time into a monetary value, that is the base figure that you're looking for in a bookkeeper, and you can begin your research.
Online bookkeeping has become a norm for many professionals, as they can manage bank feeds, business accounts, tax payments, and monthly fees while working virtually. This can aid you also, as you are not surrounded by paperwork and can view everything with more organisation.
Basic bookkeeping costs can vary, so be sure to ask for a quote before you agree to anything final. Part time bookkeeping and full time bookkeeping are options for you, as the size of your company may only require occasional financial assistance until your business grows further. All of this can still be utilised by sole traders, and other duties can be requested where desired.
If you require further assistance or believe that your small business can benefit from bookkeeping services, please reach out to our professional team, and we can advise you further.