Why do we need bookkeeping

Easier IRS Audit Bookkeeping serves a greater purpose in an audit by the internal revenue service because if your books are in order, it makes the process easier and faster. Requirement under Law Finally, it is the law that you keep financial records of your business. To avoid the termination of your business, you have to obey the law! The importance of bookkeeping cannot be over overlooked.

Contact Us at BooXkeeping to help you get your books organized for this coming year! BooXkeeping is a nationwide provider of affordable outsourced bookkeeping services to small and medium-sized businesses. Join our mailing list for the latest tips, resources, and updates from the experts at BooXkeeping. All Rights Reserved. Hire Us Today.

Here are 51 reasons why bookkeeping is important for your business: 1. Share this post. Share on facebook. Share on twitter. Share on linkedin. Share on email. A bookkeeper knows how to use financial software, but more importantly, extracts insight from the data to facilitate better business decisions.

Small businesses without bookkeepers often enter incomplete and inaccurate information into QuickBooks. This leads to poor decision making, and even harder to interpret results. The better question is: How experienced and confident are you in using QuickBooks? For example, experts use the best QuickBooks apps and tools to optimize the software. That really depends on the needs of the client.

A client with ten retail stores will require more help than one with a small website that needs some help regarding QuickBooks setup and training. Ideally, you want regular contact with your bookkeeper at least once a month so that your business remains agile.

One of the benefits of having a bookkeeper at hand is the ability to make informed business decisions based on what the numbers say. What are the numbers telling you? Ask your bookkeeper. You may want a bookkeeper who acts more like a CFO than someone who just keeps books in order. Whether you need in-house help depends. For example, a nonprofit is not likely to have someone designated who does the books for them.

And, a bookkeeper can help. This is another scenario where a bookkeeper can be a great addition in supplementing an existing position while filling a void. That could be more a matter of preference than need.

Some owners like the ability to meet with their financial experts. Most of time, there is little to no need to live in the physical area of your bookkeeping service. However, that ultimate decision is left to personal preference and the ability of a given bookkeeper to accommodate your specific needs. Clients have a lot of specific questions to ask a bookkeeper before deciding to hire one. Here are a few common questions and concerns:.

Our team has an elite background in accounting system design, software engineering, data integration, financial modeling, and business consulting. Discover how your accounting software can help your business grow and save you time and money. Skip to content Skip to primary sidebar Skip to footer. With well-managed bookkeeping, your business can closely monitor its financial capabilities and journey toward heightened profits, breakthrough growth, and deserved success.

Brushing up on your bookkeeping skills may seem like a task for another day. However, there are innumerable benefits to keeping accurate documentation and monitoring your spending and income.

To adequately log all business-related financial transactions, bookkeepers typically require a robust catalog of all transactions and associated costs.

They may group transactions into categories like good or service, wage, tax, or another general business operation. The two key reports that bookkeepers provide are the balance sheet and the income statement. Both reports should be easy to comprehend so that all readers can grasp how well the business is doing. How you organize and document your finances is up to you. You can outsource the work to a professional bookkeeper , or you can do it alone.

However you decide, note that you must keep adequate records of business transactions. Ultimately, when you have a balanced bookkeeping system, you can rest assured that you also have an accurate indicator of measurable success. In doing so, businesses of all sizes and ages can make strategic plans and develop realistic objectives. Some of the most common documentation businesses must provide to the federal government include:. Without a firm grasp on bookkeeping basics, it can be easy to confuse terms or use them interchangeably.

Bookkeeping and accounting are a perfect example. The goal of accounting is to interpret, categorize, analyze, report, and summarize all financial information accurately. Bookkeeping, on the other hand, is an integral part of the accounting process. There are two main types of bookkeeping: single-entry bookkeeping and double-entry bookkeeping.

The single-entry method is the preferred method for sole proprietors, small startups, and companies with unfussy or minimal transaction activity. The single-entry system tracks cash sales and expenditures over a period of time.

With this bookkeeping process, you must maintain three pieces of documentation. The double-entry framework is more complicated. Double-entry bookkeeping is common in accounting software programs like QuickBooks. With this type of bookkeeping, bookkeepers record transactions under expense or income. Then they create a second entry to classify the transaction on the appropriate account.

The following documents comprise double-entry bookkeeping:. You can manage your bookkeeping manually with pen and paper or digitally with online bookkeeping software. The following three bookkeeping practices can help you stay on top of your business finances. Trying to juggle too many things at once only works to put your organization in danger. Those baby steps can help you manage your organization on a new and improved system. Small steps also give everyone time to familiarize themselves with the new bookkeeping software.

The general ledger includes balance sheet accounts liabilities, equity, assets and income statement accounts revenue, expenditure, gains, losses.