Accounting and bookkeeping services include capturing and organising monetary transactions including expense and income and also creating financial statements like income statements and balance sheets. It includes entering data into journals and maintaining a record of all the accounts of a company. This record is required by regulation and law. Bookkeeping services are vital for the operation of any business's finances.
You will find 5 kinds of accounts in bookkeeping: Property (company capital and resources), revenue (profits generated by the business), debts (debts and obligations), equity (remaining worth following liabilities) and expenditures (cash for salaries and utilities).
Benefits of Accounting and Bookkeeping Services
Mentioned below are several points which make bookkeeping necessary for a company and why one should outsource bookkeeping to his / her business:
|
Benefit
|
Description
|
|
Detailed Recording
|
Professional bookkeeping services maintain comprehensive and up-to-date records, aiding in business accounting, supervising, and obtaining financial reports.
|
|
Constantly in conformity with the Law
|
Competent bookkeeping services stay updated with legal changes, ensuring compliance and fixing errors promptly.
|
|
Making plans gets easier
|
Online bookkeeping services offer insights into company accounts, facilitating future planning without worrying about data accuracy.
|
|
Quick Reporting
|
Up-to-date books enable business owners to access updated balance sheets quickly, boosting confidence and facilitating discussions with stakeholders.
|
|
Relations with investors and banks improved
|
Updated books instil confidence in business owners, improving relationships with banks and investors, potentially leading to better financial opportunities.
|
|
Better tax predictions
|
Proper bookkeeping provides accurate financial statements for tax purposes, allowing business owners to analyse tax obligations more precisely.
|
|
Quicker business response time
|
Having updated accounts allows for quicker decision-making in response to market or business changes.
|
|
Easier Audits
|
Comprehensive bookkeeping simplifies the audit process, as clean accounts make financial statement creation faster and audits easier.
|
Differences Between Accounting and Bookkeeping
These are the differences between bookkeeping and accounting services:
|
Characteristic
|
Accounting
|
Bookkeeping
|
|
Purpose
|
Summarisation and interpretation of financial data
|
Recording of financial transactions
|
|
Scope
|
Wider
|
Narrower
|
|
Focus
|
Big picture
|
Details
|
|
Tools
|
Financial statements, tax returns, etc.
|
Accounting software
|
|
Expertise
|
Required
|
Not required
|
What is the Role of a Bookkeeper?
A bookkeeper does more than enter data and file taxes. The bookkeeper also manages deposits, payroll, develops financial statements, reconciles bank statements and assists with audits. He also wants to enhance financial accountability - so a controller checks the bookkeeper's ledger for accuracy.
They're responsible for:
- Frequently reconciling bank statements.
- Categorising transactions into specific accounts.
- Detecting and correcting errors in financial records.
- Keeping accurate expenditure records.
- Handling employee salaries, payments, and tax deductions.
- Assisting in preparing financial statements.
- Producing monthly financial reports.
- Transmitting financial insights to decision-makers.
- Providing financial training and direction.
- Ensuring compliance with financial policies and procedures.
- Conforming to accounting principles and regulatory requirements.
- Collaborating with accountants and auditors during audits.
- Working with tax experts for tax returns and compliance.
- Providing financial data to stakeholders and investors.
Importance Of Bookkeeping in Business
Proper accounting bookkeeping makes keeping accurate financial records easier than businesses are required by law for tax purposes. A thorough bookkeeping accounting and accountancy also has business advantages. A successful business needs very good bookkeeping for reasons including:
|
Benefits of Bookkeeping
|
Description
|
|
Budgeting
|
Recording income and expenses facilitates examination of financial resources, aiding in assessing cash flow.
|
|
Organisation
|
Bookkeeping provides structured financial records, essential for authorities, investors, accountants, and lenders. Facilitates easy access to information when needed.
|
|
Analysis
|
Enables the creation of financial statements for tracking cash flow and identifying business strengths and weaknesses.
|
|
Planning
|
Financial statements help evaluate project success, aiding shareholders and business owners in making informed future plans.
|
Types of Accounting and Bookkeeping Services
Different kinds of cloud accounting packages include outsource accounting online and Offline. These bookkeeping services include:
- Cash: It doesn't get simpler than your bank account. All your business activities - in & out - will go through your cash account. The more active the business, the harder it is tracking your cash flow.
- Accounts receivable: In case your company has Accounts with customers that do not require immediate payment, like a 30 day credit period, you need an accounts Receivable part in your bookkeeping. This account shows you how your payments are performing - collected or not - collected.
Watch this account because if several orders are misplaced or slip through the cracks, you could be out of pocket and must make up the real difference so the invoices will be balanced correctly. Organise this particular account so you can send out bills on time & make payments correctly.
- Inventory: Your inventory account must reflect all of your products. Regular stock takes should be performed to track everything you have in stock. You then can account for anything that's sitting around waiting being sold.
- Accounts Payable: This is often the account nobody likes because you can see precisely what money is leaving or has left the business and when. You, similar to the others, must maintain this account to stay away from late payments, overspend & shorten monthly expenses, most importantly, and, never pay anybody more than once.
Good organisations will frequently assist with early payments which, in case you build a good reputation together with the creditor, could get your business a discount or special offer.
- Loans payable: If you ever obtained a business loan, you must track them in your loans payable account. This account will track all your unpaid charges and deadlines for payments.
- Sales: This account tracks all of your incoming revenue from sales transactions. Recording these sales routinely and on time is critical to your company's true position. You do not want to wait a long time before recording sales transactions in case you're taking lots of orders each day, simply because mistakes are not hard to make. This might mean individuals do not receive their orders.
- Purchases: Your bookkeeper ought to track any materials or goods you buy for your business in your purchases account. This account includes a hyperlink to the prior sales account. Both are necessary to calculate COGS and your company's gross profit.
- Payroll Expense: Payroll is normally the most costly expense in the company. This account pays your employees the correct amount each month and also serves to compute taxes along with other government needs. The wrong amount of tax could enable you to get in big trouble so do everything correctly.
- Retained Earnings: Your retained earning accounts track any profits which are returned to the business. Retained earnings is a running total of money maintained since the company was established. This account is pretty simple to manage and important for investors & shareholders wanting to know exactly where their cash is going and the business is performing very well.
Eligibility for Accounting and Bookkeeping Services
The following entities are eligible and can choose book keeping and accountancy services:
|
Eligible Entities
|
Description
|
|
Consultants and Professionals
|
Individuals in various fields like law, medicine, architecture, or consultancy who need organised financial records for their business finances.
|
|
Share Market Traders
|
People or entities involved in buying and selling stocks, securities, or other financial instruments, requiring accurate bookkeeping for investment activities.
|
|
Goods Traders
|
Retailers, wholesalers, distributors, or manufacturers who maintain detailed records of sales, purchases, or inventory.
|
|
Startups and Small Businesses
|
New businesses or small enterprises benefit from bookkeeping services to establish a financial foundation, track cash flow, expenses, and prepare financial reports.
|
|
Non-Profit Organisations
|
Charities or non-profit entities needing proper bookkeeping to manage funds, track donations, and report financial activities to regulators and stakeholders.
|
|
Professional Service Firms
|
Companies providing professional services such as marketing, consultancy, or IT, requiring accounting to monitor task budgets, billable hours, and prepare invoices.
|
|
Real Estate Agents/Property Managers
|
Individuals or firms involved in real estate transactions or property management, utilising bookkeeping to track rental income, expenses, and property finances.
|
Documents Required for Accounting and Bookkeeping Services
Following are the set of documents required for outsourced accounting services:
|
Documents Needed for Outsourced Bookkeeping Services
|
|
1. Company/Business Registration Papers
|
|
2. Bank Statements for the Financial Year or Monthly Records
|
|
3. Purchase and Sales Invoices, if available
|
|
4. Receipts for Expense
|
|
5. Accounts Receivable and Payable Details
|
|
6. Any Relevant Government Registrations
|
|
7. Cash Expenditures
|
|
8. Bank Statements of Partners/Members for Business Transactions
|
|
9. Expenses Incurred for Company or LLP Registration by Promoters
|
Procedure of Business Bookkeeping and Accounting
Accounting book keeping involves the following steps as described below:
1. First Consultation
- Connect with StartupFino (bookkeeping service provider) to discuss your specific business requirements.
- Help us understand your business for our services.
2. Agreement & Documents
- Receive an agreement outlining the terms, scope of work, and costs.
- Review and sign the agreement to proceed.
3. Giving Financial Documents
- Collect and provide relevant financial documents such as bank statements, bills, and invoices.
- Ensure documents are organised and accessible.
4. Data Entry and Organisation
- Bookkeeping service enters financial data into our accounting software.
- Organise data systematically for easy management.
5. Classification and Categorisation
- Classify financial transactions by nature and function.
- Create meaningful reports and financial analysis.
6. Reconciliation
- Reconcile bank accounts, credit card statements, and other financial records with accounting entries.
- Identify discrepancies/errors and verify financial data.
7. Financial Reporting
- Generate periodic financial reports like profit & loss statement, financial statements, and cash flows.
8. Ongoing Review and Support
- Address questions and concerns about financial records.
- Provide insights for better financial management.
9. Tax Preparation Assistance
- Prepare financial statements and paperwork required for tax filing.
- Ensure compliance with tax regulations and maximise tax deductions.
Accounting & bookkeeping services might have a different procedure; talk about these specifics with us. StartupFino, with its staff of qualified professionals can assist you to understand the process and determine the best steps in the process.
Why Choose StartupFino for Accounting and Bookkeeping Services?
Accounting and bookkeeping services should give a monthly overview of the company's finances. Such information is important for analysing the company's financial health and making suggestions on ways to help keep it and also make it better.
StartupFino offers accounting & bookkeeping solutions. We can assist with advice in the initial phase through to ensuring you satisfy all the requirements and compliances.
