Bookkeeping Services
Bookkeeping Services
Bookkeeping forms the basis of all the accounting procedures of a business. The management needs data of the company to analyze its activities and formulate a future plan, and this is where Bookkeeping comes into play. Let us know more about what is Bookkeeping and how does it help a business.
When a business is established, it undertakes a number of transactions during a business journey. Some of these transactions are important, and some of them can be a wrong decision. The process of accounting helps the management to understand the various transactions which are conducted, but in order to conduct the accounting procedure, it is necessary for the management to record all the transactions conducted by the Business. This is where Bookkeeping comes into play.
Bookkeeping can be defined as the process of recording all the financial transactions made by a business. It is the responsibility of the bookkeeper to record, classify and summarize all the transactions of the business so that they can be used further.
Many people think that the process of Bookkeeping is the same as the process of Accounting, but this is a misconception. Bookkeeping can actually be considered a subset of the Accounting Function. In Bookkeeping, it is required that all the transactions of a business are recorded and classified, whereas, in accounting, the recorded transactions are further analyzed to find out what is the present situation of the Business and also derive a future plan.
As we have seen, bookkeeping refers to the maintenance of daily business records. Let’s see why this is essential for any business.
Method and Need of Bookkeeping Services for Business Entities
The most preferred method of bookkeeping is the double-entry method, where each transaction is recorded twice in the two corresponding accounts simultaneously. The total debit must be equal to the total of credit to maintain the financial balance of the firm.
As we have seen, bookkeeping refers to the maintenance of daily business records. Let’s see why this is essential for any business.
- Bookkeeping eases the process of company audit
- It is essential for future forecasting and decision-making
- It helps to reduce any malpractices
- It helps in preparing financial statements
- It provides an easy understanding of inflow and outflow mediums of cash
The process of Bookkeeping is one of the basic activities which cannot be foregone or replaced in any other way. Moreover, this is the activity that allows an accountant to be able to do his work. Were it is not for Bookkeeping, and no business would have been able to function to its full potential. Bookkeeping not only helps the accounting process to happen properly, but it is also required to conduct various other services such as Auditing, Tax filing etc.
Not all the transactions of the Business can be remembered, and as the size of the business increases, so does the number of activities also. At some point, the management needs to start recording all the transactions of the company. This will also help in a later date as the management will be able to compare the present situation of the company with the past performance.
In today’s world, more and more freelancers are coming up, and for a freelancer, it is very important to not forgo the bookkeeping process. The bookkeeping process will help him to record all the necessary parts of the Business and will also help in the generation of utility and value from the Business.
The importance of Bookkeeping is clear to all of us. There are certain practices that should be followed by the businessmen so that all the financial transactions of the Business are recorded, and they do not face any problems in the future. Some of the good practices for Bookkeeping are:
- First of all, when starting a business, the businessman should keep all the transactions separate. There are many instances where the businessman operates out of the same books of accounts for his personal use as well as for the Business. This is not a correct practise as this may create confusion in the future.
- All the expenses of the Business, no matter how small, must be recorded. It is better to have a complete recording of the business expenses so that they can be utilized in the future.
- As the size of the Business rises, so does the roles and responsibilities of the bookkeeper. At this stage, the management should avail external assistance so that there is no error in the recording of the transactions of the Bookkeeping.
A business has the option of either keeping a separate department for Bookkeeping and Accounting, or it can outsource the particular services to a third party. There are advantages and disadvantages of each move for the management, and it is important that the management understand the need and requirement of the Business and acts accordingly.
Only the companies which have a solid backing or do not have to worry about funds will be inclined to keep a separate department for Accounting and Bookkeeping. When the Business is growing, and not much funds are available, the management will tend to go for outsourcing the bookkeeping activities of the Business.
There are many advantages of availing outsourcing services for Bookkeeping. These advantages include:
- It saves both money and time for the company. The company will be able to utilize these resources for the betterment of the company.
- With better bookkeeping services, there will be a visible improvement in the cash flow of the Business. Since the management will be able to track all the transactions of the business, they will be able to make better decisions for the future of the Business.
- The accounts of the company will include record all the transactions of the business, which will, in turn, help the management while filing for taxation.
Selecting a bookkeeper can be very crucial as even a small mistake made by the bookkeeper can result in a huge blunder as the effect of this mistake will be compounded. Certain things that should be checked before a bookkeeper for the company is chosen are:
- The reviews of the bookkeeping firm need to be checked as these reviews will provide a fair idea of how the firm works and how effective are their services. The company can check with the former clients too to understand the workings of the company in better.
- Various bookkeepers have different specializations, and this means that different bookkeepers have different expertise. The management should first understand the requirements of the Business and, accordingly, choose which bookkeeper will be best suited for the Business.
- The quality of services provided by the firm is rather important for the management to decide whether they should avail the services of the firm or not. The firm which provides the highest quality of services at an affordable price has the best chances of being chosen by a business for outsourcing purposes.
Bookkeeping refers to the recording of financial transactions whereas accounting is the periodic processing of these records for various business purposes like reporting, budgeting, strategy and planning. In a way, bookkeeping is a prerequisite to accounting.
GSPU, provides a wide range of bookkeeping service considering a holistic view of business entity types. We deal from the initial to the advanced bookkeeping services. Some of these services include:
- Company profile setup
- Maintenance of bills
- Maintenance of customer invoice and payments
- Reconciliation of bank accounts
- Custom-designed reports
- Quarterly budget reviews
- Payroll and tax management
Evaluation of Bookkeeping Services at GSPU
A business entity has a mandated rule to follow the bookkeeping and accounting service according to law. Now, at one point it becomes a necessity to evaluate these recordings based on certain parameters for any organization so as to know the level of their performance and stability.
We at GSPU evaluate the bookkeeping services on the basis of cost, income and expense categorization, payroll, tax service, software used to maintain the book of records, customer service provided by the business entity,e.t.c.
