Understanding Bookkeeping Services

Bookkeeping is the process of organizing, categorizing, recording, and reconciling a businesses’ financial transactions. By maintaining up-to-date documentation of finances, bookkeeping helps provide insight into a company’s financial health and gives small business owners information and tools they can use to make better financial decisions. This guide will answer some of the most common questions people have about online bookkeeping services. 

The job of a bookkeeper is to document daily transactions and prepare important financial statements for a business. Most bookkeepers focus on three types of financial statements: Profit and loss statements; Balance sheets; Cash flow statements. A profit and loss statement, which is also referred to as an income statement, is a record of a business’s revenue and expenses over a set period of time, such as a month or a quarter. A balance sheet is a summary of a company’s liabilities, assets, and shareholder equity. A cash flow statement documents what cash is coming into and leaving a business and includes cash flow from day-to-day operations, as well as cash flow from investing and financing. 

While recording financial transactions and compiling income, cash flow, and balance sheet statements are the primary job of a bookkeeper, bookkeeping services may include other tasks, such as management of accounts receivable, management of accounts payable, monitoring of debt levels, bank reconciliation, payroll processing, and more. Not every bookkeeper will provide all of the same services, but there is typically a lot of overlap.

QuickBooks is a software package for bookkeeping and accountant. While a useful tool, the software can’t account for user error and doesn’t have the ability to identify mistakes, offer suggestions, or provide insights into your company’s financial health. Many small businesses choose to use both QuickBooks and a professional bookkeeping service because they want the peace of mind of knowing their financial records are accurate and up-to-date.

Many small business owners choose to outsource bookkeeping services to an expert because keeping the books can be a time-consuming, cumbersome process. Using a professional service frees up their time so they can focus on growing their business. When considering if it is worth hiring a bookkeeper, consider how much time you spend tracking transactions and if your time is better spent elsewhere. Also, consider how confident you are in your ability to keep reliable and current records. Working with a professional bookkeeper can give you peace of mind and allow you to make smarter financial decisions.