How can good accounting and bookkeeping services lay the foundations for your business?
Legitimate businesses must keep accurate accounting records to build a stable financial foundation. Reliable, organized, and up-to-date recordkeeping is the information that a business owner relies on when making critical financial decisions. While some people assume that bookkeeping and accounting are the same thing, there are, in fact, significant differences between accounting and bookkeeping services.
A good accounting and bookkeeping service is an essential business function. Bookkeeping ensures that the company’s financial transactions are accurately accounted for. To make critical business decisions, a business owner requires financial statements, reports, and data that are prepared via accounting and include the summarizing, interpreting, and communicating of all financial transactions.
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Accountant vs. Bookkeeper
While both professional services are financial-based, they are fundamentally different practices. An accountant is responsible for account analysis and can offer the business in-depth financial management guidance and advice.
A bookkeeper must primarily manage data entry into the company’s accounting software. They monitor a business’s day-to-day invoicing, payments, purchases, sales, and expenses transactions.
Records are kept in general ledgers, supplier and customer ledgers, and petty cash books. All entries are allocated in categories of income and expense accounts in single-entry and double-entry bookkeeping systems.
In the past, bookkeepers recorded and maintained the data in a handwritten book. Today, bookkeeping is mostly digitized and maintained electronically.
The two services work in tandem to maintain accurate and documented financial records. They lay a solid foundation on which you can build a successful business.
Financial foundation building
For a business to succeed and prosper, it’s crucial to have a solid financial foundation and accurate supporting financial statements. Accounting and bookkeeping services are a priority in running a profitable business.
In the process of accounting, bookkeeping plays a vital role. A bookkeeper compiles a record of all financial transactions so that an accountant can prepare financial statements.
As a business owner, accurate financial reports are essential, as you will base your company’s growth decisions on the financial statements that an accountant prepares. Bookkeeping mistakes can result in errors in your financial reports that may prove costly and put your business at risk.
To set your business up for success, hire the best accounting and bookkeeping services you can afford. Experienced and trustworthy financial professionals with credentials will maintain your records of financial transactions and data with reliability and accuracy so that you have peace of mind and more time to build a successful and profitable company.
A good accounting and bookkeeping service will ensure that you’re better informed of all financial transactions and the financial health of your business. With this information, you’ll be more able to plan future budget allocations confidently.
You’ll additionally save time while filing for tax returns, be able to visualize the impact of certain business decisions, and easily track business profitability. Your investors will also have up-to-date and accessible information readily available.