subject: Growing A Business With Effective Bookkeeping And Accounting [print this page] Organized and updated financial records are the basic elements of bookkeeping and accounting. Bookkeepers and accountants rely on your books to prepare your taxes (among other things).
The job of a bookkeeper is different from that of an accountant but the two do intersect in some aspects, especially during tax preparation and filing season. Bookkeeping focuses more recording of a persons or a companys financial transactions such as sales, payroll, invoices, and deductibles. Bookkeeping used main methods of recordingsingle entry and double entry. The former is the simpler method but most companies use the double entry method of bookkeeping because it is more comprehensive and detailed.
Accounting covers a broader scope of tasks. It is the systematic recording, reporting, and analysis of financial transactions of a business. The person in charge of accounting is known as an accountant, and this individual is typically required to follow a set of rules and regulations, such as the Generally Accepted Accounting Principles. Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit. Accountants are the ones you look for help during tax preparation season.
These days, Certified Public Accountant Firms provide both services of bookkeeping and accounting. In order to make a company or a small business work efficiently, services of Certified Public Accountant Firms need to be part of their standard working procedures. In addition, rules o taxes and tax filing is changed and adjusted every year by the IRS and so, in order to avoid confusion, companies even procure their own accounting and bookkeeping department.
Small businesses, in particular, benefit a lot from bookkeeping. Present trends such as Quick Books consulting are helping a lot of small companies stay afloat during the current economic crisis by providing them a heads up on the more feasible directions with their investments. Bookkeepers will organize all of your financial transaction records - receipts, canceled checks, sales, purchases, payroll, cash disbursements, etc. The bookkeeper makes sure that your books remain organized and balanced and can then turn over records so that your accountant can generate monthly financial statements. Furthermore, bookkeeping software such as Quick Books consulting have changed and raised the standards on record keeping, especially in the eyes of the IRS.
Investors and lenders will also want to see accurate and complete financial data before granting you financing. If you are seeking or plan to seek outside capital, your books must be in order. In order to do that, you need regular bookkeeping (at least monthly). In addition, you need accurate information to manage the financial health of your company. You must know if there are customers in arrears, or if you have outstanding balances on your lines of credit. Without accurate records you cannot manage the cash flow of your business.
A companys tax contributions are also the key to keeping yourselves from getting audited. Looking ahead, taxes will continue to be used for social engineeringto encourage job creation, help the unemployed, provide incentives for going green, assist U.S. companies going global, and ensure that most Americans have health coverage. Taxes will also be used to serve its traditional function as a revenue raiser to pay for national defense. Since big and small business generally want to be relevant with their services through their contributions, it is then imperative that you have accountants in tune with emerging trends in the industry.
For example, one accounting trend of 2010 is the replacement of the generally accepted accounting standards (GAAP) with international financial reporting standards (IFRS). Hiring certified public accountant firms will ensure you that you will be in-line with the requirements of the given standards. This is only one of the many reasons of why employing the help of bookkeepers and accountants is detrimental to your business success.
by: Businesslocallistings
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