How Important Are Professional Bookkeeping Services For Your Business & Accurate Financial Records?
The short answer is very! Professional bookkeeping services are important for any business that wants accurate financial records and growth.
Choosing the right professional bookkeeping service provider is critical to ensuring that your business is compliant and that you have the foundation needed for good accounting, tax and financial reporting.
Do I Need Bookkeeping Services Near Me?
Not anymore! With the advancements in technology and cloud-based accounting solutions, the physical proximity of your bookkeeper is no longer a requirement. You can work seamlessly with a bookkeeper located anywhere in the world. Embracing remote bookkeeping allows you to access top talent and expertise without being limited by geographic boundaries.
Three Reasons To Keep Accurate Financial Records
Here are three of the most important reasons to keep accurate financial records in your business.
1. Compliance
Accurate financial records are essential if you want to meet legal and regulatory requirements, such as calculating and paying sales tax, income tax filings and financial reporting obligations. Non-compliance can result in penalties, fines, and legal consequences for your business.
2. Informed Decision Making
Accurate record keeping gives you confidence in the reports you look at. With these reports you can understand your financial health and make informed decisions. You can analyze income, expenses, cash flow, and profitability, facilitating budgeting, forecasting, and strategic planning.
3. Stakeholder Communication
If you need to communicate your business’s financial performance to stakeholders, such as shareholders, investors, lenders, and partners, you’ll need good recording keeping. Reliable records build trust, credibility, and transparency, fostering strong relationships and opening doors to potential opportunities.
How Do You Maintain Accurate Financial Records?
There are a number of ways that professional bookkeeping services keep accurate financial records.
Organizing & Categorizing Transactions
The starting point is putting in place a clear filing system for financial documents, such as invoices, receipts, and bank statements. Transactions should be categorized based on income, expenses, assets, and liabilities for easier tracking and analysis. Depending on the volume of transactions this can be done daily, weekly or monthly.
Using Accounting Software
Professional bookkeeping services use accounting software to simplify how your financial transactions are recorded and tracked. This is reliable software that allows for automation, generating reports, and organizing data efficiently.
Reconciling Bank Statements
Bank account statements and credit card statements should be regularly reconciled with your financial records to identify any discrepancies or errors. Reconciliation ensures that all transactions are accurately recorded and helps uncover any missing or incorrect entries. If you’re using accounting software, a lot of these reconciliations can be ‘mapped’ and automated.
Tracking Income & Expenses
All income and expenses should be recorded promptly and accurately. Details such as dates, amounts, and descriptions should be included in record keeping to provide a comprehensive description of your financial activities.
Supporting Documentation
Professional bookkeeping services will have a system in place to retain all relevant supporting documentation, such as receipts, invoices, and contracts. These documents serve as evidence of transactions and can be crucial for audits, tax filings, and financial analysis. As a rule of thumb it’s a good idea to keep business records for up to seven years in case of an IRS audit. With modern accounting software all of these records can be securely digitized and stored in the cloud.
Conducting Reviews
Good bookkeepers will set aside time to review your financial records periodically. They check for any inconsistencies, outliers, or potential errors.
How To Choose Professional Bookkeeping Services
Here are some factors to consider when selecting professional bookkeeping services for your business. This will ensure accurate financial records and help you check your finances in order.
Experience
Look for a CPA firm (certified public accountant) or bookkeeping service provider with experience working with businesses in your industry. They should have a deep understanding of the financial challenges and opportunities unique to your specific business niche. If you work in the contractor industry for example, choose a construction CPA who will be better equipped to handle industry-specific transactions, regulations, and compliance requirements.
Tax Knowledge
Things like sales tax and tax saving strategies can be complex issues for businesses. Sales tax is different across each state and even across counties and regions within the same state.
If you run a business in Miami, choose bookkeeping services in Miami that understand local tax laws. At EGomezCPA we can help you get your tax affairs in order and also save you as much tax as possible.
Data Security
Your business’s financial information is sensitive and confidential. Ensure that the bookkeeping service provider you choose has security measures in place to protect your financial data.
Inquire about their data storage practices, backup protocols, encryption methods, and privacy policies.
Communication And Accessibility
You want to be able to communicate easily with your bookkeeper. Ensure that the provider is accessible and responsive to your inquiries and concerns. You should be able to reach them easily via email, phone, or other preferred communication channels.
Technology & Software
Inquire about the technology and professional tools the bookkeeping service provider uses. They should make use of up-to-date technology and accounting software to keep your financial records organized, accessible, and secure.
At EGomezCPA we offer professional bookkeeping services to businesses in Miami and across the US, 100% online. Contact us today to make an inquiry about our services for your business.
FAQs
Can bookkeepers do financial statements?
Yes, bookkeepers can prepare financial statements for businesses. While their primary responsibility is to record and organize financial transactions, bookkeepers often have the expertise to generate financial statements based on the data they have recorded.
Financial statements such as the balance sheet, income statement, and cash flow statement provide valuable insights into a company’s financial performance and overall health.
What is the best way to keep records for a small business?
The best way to keep records for a small business is to establish a systematic and organized approach. Start by implementing a consistent filing system for all financial documents, including invoices, receipts, bank statements, and contracts. Utilize accounting software to track income and expenses, automate calculations, and generate financial reports. Regularly reconcile bank statements with your financial records to ensure accuracy.
What is one of the most common bookkeeping mistakes that business owners make?
One of the most common bookkeeping mistakes that business owners make is neglecting to separate personal and business finances. Many entrepreneurs mix personal and business expenses, using the same bank accounts and credit cards for both. This makes it challenging to track and accurately record business transactions, leading to confusion, errors, and potential tax issues. It is crucial to establish separate bank accounts and credit cards specifically for business purposes.
How can we prevent inaccurate financial reporting?
Choosing professional bookkeeping services for your business ensures accurate financial records and will prevent inaccurate financial reporting.
How do I choose the best accounting and bookkeeping services?
To choose the best accounting and bookkeeping services, consider factors such as their experience, expertise in your industry, range of services offered, technology used, client reviews and references, and pricing structure.
Is there a CPA near me for small business?
E. Gomez CPA LLC is located in Miami and offers bookkeeping and CPA services. We offer virtual services to assist you no matter where your business is located in the US.
