When it comes to managing your business finances, the array of services provided by bookkeeping firms can be quite diverse. Each firm may offer a different suite of services, tailored to meet the unique needs of their clients. Understanding what these services entail can help you decide what your business needs to stay financially healthy and compliant.
Routine Bookkeeping
Routine bookkeeping is the backbone of any business's financial management. This service involves the regular recording of financial transactions, ensuring that all income and expenses are accurately documented. Routine bookkeeping typically includes:
- Recording Transactions: Logging every sale, purchase, receipt, and payment made by the business.
- Reconciling Accounts: Ensuring that the bank statements match the company's internal records.
- Generating Financial Reports: Providing monthly, quarterly, or annual financial statements such as profit and loss statements, balance sheets, and cash flow statements.
- Tracking Accounts Payable and Receivable: Keeping tabs on what the business owes and what it is owed.
By maintaining up-to-date and accurate records, routine bookkeeping helps businesses stay organized and prepared for tax season, financial audits, and strategic planning.
Creating New Books
Starting fresh with new books can be crucial for new businesses or those looking to restructure their financial management. Creating new books involves setting up a new accounting system from scratch. This service typically includes:
- Chart of Accounts Setup: Establishing a list of all accounts used to record transactions.
- Software Configuration: Setting up accounting software like QuickBooks to suit the business's specific needs.
- Initial Data Entry: Entering all the initial financial data, such as opening balances and historical transactions.
- Customization: Tailoring the system to include specific categories and reports that are relevant to the business.
Creating new books ensures that your financial records are structured correctly from the beginning, providing a solid foundation for future financial management.
Cleaning Up Books
If your books have fallen behind or are in disarray, a cleanup service can get your financial records back on track. Cleaning up books involves:
- Reviewing Past Records: Going through past transactions to ensure accuracy and completeness.
- Correcting Errors: Identifying and fixing any mistakes in the records.
- Reconciliations: Ensuring that all accounts are balanced and that there are no discrepancies between the books and bank statements.
- Updating Information: Bringing all financial data up to date, which is especially important for tax preparation and compliance.
Book cleanup is often necessary before significant financial events, such as audits, loan applications, or preparing for tax season.
Assisting with Payroll
While not all bookkeeping firms provide full payroll services, many offer assistance with payroll management. This can include:
- Setting Up Payroll Systems: Configuring payroll software to handle employee payments, tax withholdings, and benefits.
- Processing Payroll: Ensuring that employees are paid accurately and on time.
- Tax Filings: Assisting with the preparation and filing of payroll taxes.
- Compliance: Ensuring that the business complies with all relevant payroll regulations and laws.
By assisting with payroll, bookkeeping firms can help businesses avoid costly mistakes and ensure that their employees are paid correctly and on time.
Assisting with Invoicing
Effective invoicing is crucial for maintaining healthy cash flow. Bookkeeping firms can assist with invoicing by:
- Creating and Sending Invoices: Generating invoices based on sales and services rendered and sending them to clients.
- Tracking Payments: Monitoring which invoices have been paid and which are still outstanding.
- Follow-Up on Late Payments: Sending reminders and follow-ups to clients with overdue invoices.
- Customizing Invoices: Tailoring invoices to include specific information required by the business or clients.
By assisting with invoicing, bookkeeping firms can help ensure that businesses get paid on time and maintain positive cash flow.
Expense Tracking
Expense tracking is essential for understanding where your money is going and for maximizing tax deductions. A bookkeeper can help by:
- Recording Expenses: Logging all business expenses accurately and categorizing them for easy reference.
- Monitoring Spending: Keeping an eye on business expenditures to identify areas where costs can be cut or managed more effectively.
- Receipts Management: Organizing and storing receipts to support expense claims during tax season.
Bank Reconciliations
Bank reconciliations are crucial for ensuring the accuracy of your financial records. A bookkeeper can help by:
- Comparing Records: Matching the transactions recorded in the business's books with those on the bank statements.
- Identifying Discrepancies: Spotting and resolving any differences between the two sets of records.
- Correcting Errors: Making adjustments to ensure that the financial records are accurate and up to date.
Financial Reporting
Financial reports provide insights into the financial health of your business. A bookkeeper can help by:
- Preparing Reports: Generating financial statements such as income statements, balance sheets, and cash flow statements.
- Analyzing Data: Interpreting the financial data to provide insights into the business’s performance.
- Making Recommendations: Offering advice based on the financial reports to help improve business operations and profitability.
Accounts Payable Management
Managing accounts payable ensures that your business maintains good relationships with suppliers and avoids late fees. A bookkeeper can help by:
- Recording Bills: Entering all vendor bills into the accounting system.
- Scheduling Payments: Ensuring that bills are paid on time to avoid late fees and maintain good credit terms.
- Monitoring Outstanding Bills: Keeping track of all unpaid bills and ensuring they are paid promptly.
Accounts Receivable Management
Managing accounts receivable ensures that your business receives payments on time, maintaining healthy cash flow. A bookkeeper can help by:
- Invoicing Customers: Creating and sending invoices to customers for products sold or services rendered.
- Tracking Payments: Monitoring which invoices have been paid and which are still outstanding.
- Following Up on Overdue Payments: Sending reminders and follow-up notices to customers with overdue invoices.
Credit Card Reconciliation
Credit card reconciliation ensures that all credit card transactions are accurately recorded and accounted for. A bookkeeper can help by:
- Recording Transactions: Entering all credit card transactions into the accounting system.
- Reconciling Statements: Comparing the recorded transactions with the credit card statements to ensure accuracy.
- Identifying Discrepancies: Spotting any unauthorized transactions or errors and resolving them promptly.
General Ledger Maintenance
Maintaining the general ledger is essential for accurate financial reporting. A bookkeeper can help by:
- Updating Entries: Ensuring that all financial transactions are accurately recorded in the general ledger.
- Reviewing Entries: Regularly reviewing the ledger to ensure all entries are correct and complete.
- Correcting Errors: Identifying and correcting any errors or inconsistencies in the ledger.
Sales Tax Reporting
Sales tax reporting is essential for compliance with state and local tax regulations. A bookkeeper can help by:
- Calculating Sales Tax: Determining the correct amount of sales tax to be collected based on sales transactions.
- Preparing Returns: Preparing and filing sales tax returns accurately and on time.
- Maintaining Records: Keeping detailed records of all sales tax collected and remitted to support compliance.
Cash Flow Management
Effective cash flow management ensures that your business has enough liquidity to meet its obligations. A bookkeeper can help by:
- Monitoring Cash Flow: Keeping track of cash inflows and outflows to ensure the business has sufficient cash on hand.
- Forecasting: Creating cash flow forecasts to predict future cash needs and avoid shortages.
- Improving Cash Flow: Identifying strategies to improve cash flow, such as speeding up collections or delaying payments.
Inventory Management Assistance
Inventory management is crucial for businesses that sell products. A bookkeeper can help by:
- Tracking Inventory Levels: Monitoring inventory levels to ensure the business has enough stock to meet demand without overstocking.
- Valuing Inventory: Ensuring that inventory is accurately valued for financial reporting purposes.
- Managing Costs: Identifying ways to reduce inventory costs, such as negotiating better terms with suppliers.
Conclusion
In addition to routine bookkeeping, creating new books, cleaning up books, assisting with payroll, and assisting with invoicing, there are numerous other services that bookkeepers can provide without needing a CPA license. Services like expense tracking, bank and credit card reconciliations, financial reporting, managing accounts payable and receivable, general ledger maintenance, sales tax reporting, cash flow management, and inventory management assistance can significantly benefit a business. Each bookkeeping firm offers different services, so it's important to choose a firm that aligns with your specific business needs.
If you're looking for expert bookkeeping services tailored to your business, contact SpeedyLedgers for a free bookkeeping consultation. We're here to help your business thrive.
