As the name suggests bookkeeping is the process of collecting and recording financial transactions and maintaining of these records by an organization.
Some of the key reasons why bookkeeping is an important activity that should be adopted by even small-time business owners are:-
a. The primary reason is that it helps businesses file accurate year-end taxes reducing all last minute hassle of doing the required paperwork, pulling out year-long data, arranging it and other issues.
b. It helps in running the business in accordance with and compliant with government rules and regulations.
c. It helps businesses to evaluate their current financial performance as it tracks all expenses and income of the company. Also in the future when the company wants to raise capital from the market or sell off their business, potential investors and buyers would want to go through the documents related to past performance of the company.
d. Bookkeeping records are also vital for forecasting and setting future financial projections goals of the organization
One of the best ways to ensure a proper accounting system by a company is to hire a professional organization that deals in bookkeeping and tax preparation services. As part of bookkeeping services, they advise businesses on
Professional bookkeepers have the requisite knowledge, certification, training and experience in bookkeeping services thereby helping business owners keep their focus on the primary business needs whereas tasks related to accounts payable, accounts receivable and taxes are taken care of by the bookkeeper. His main job is to ensure that the company files correct and timely tax returns and all payments are done as per schedule keeping the credibility of the company intact. Small business accounting services should be hired by businesses that have just started operating and have daily expenses and incomes, though of smaller values.
Some of the main books that a company should maintain for proper bookkeeping are:
