Does your business need help staying organized, but you don’t know where to start? Bookkeeping is an essential component of any successful business. But what is bookkeeping exactly? It may seem like a broad term, but we’ve put together a helpful list to outline some of the basic elements of bookkeeping.
Debits and Credits
One of the backbones of bookkeeping is debits and credits. Bookkeepers record what your business spends (debits) and what your company earns (credits) to help you keep track of your finances and cash flow.
While not the most glamorous of tasks, invoicing is crucial to getting paid. Suppose you fail to collect fees owed to you due to oversights in invoice collecting and tracking. In that case, you will be handing out products and services for free and losing money in the process. When you dreamed of opening a business, you probably didn’t picture yourself tracking down invoice payments from clients. This is why hiring a specialized bookkeeper may be an excellent option for you. Not only do professional bookkeepers make invoices are sent and tracked, but we have experience handling the collection of late payments and working with clients.
The other end of the spectrum from accounts receivable is accounts payable—keeping track of the money you owe to others. Your business’s reputation depends on financial stability. Part of that is making sure you reliably make payments on time to local vendors, businesses, and contractors. Build trust in your company, which will keep your credit high and make others want to continue working with you.
Employees are the most valuable asset of any business. Whatever product or service you offer is no good without the people behind them. Not only do your employees interact with customers, but they keep things running smoothly. Once you find suitable employees, you will want to do everything you can to keep them. Turnover and staff training can be expensive and eat up valuable time. Paying employees correctly and on time each pay period is a great way to make sure they are happy. Whether it’s full-time employees or part-time employees, bookkeepers can make sure that all of your staff’s paperwork is in order. They will also organize and collect timesheets, process payments, and file the appropriate tax information.
Bookkeepers work hard to cross every “t” and dot every “i.” In any business, there is a lot of paperwork to keep track of. Your bookkeeper will make sure that your bank statements regularly match up with your bank accounts. Having a bookkeeper will help you avoid mistakes, missed deposits, or incorrect funds.
Taxes can be a stressful ordeal for most businesses. First, there’s the question of whether or not you filed everything correctly. Secondly, there’s the matter of avoiding unnecessary fees and ensuring you get all the credits of which your business is eligible. Your bookkeeper will keep your tax-related documents organized throughout the year, prepare your files, help you plan, and represent you in front of the IRS.
All in all, bookkeeping encompasses all the nuts and bolts that keep your company running smoothly. Paperwork and accounting are not areas where you want to cut corners. By hiring professionals, you can take a great deal of stress off your plate and give your customers, business partners, and staff complete confidence. Consider booking an appointment to learn about ways in which we might be able to help you and your business by calling 410.764.3731, emailing us at email@example.com, or filling out a form on our website.