Running a business can be stressful and challenging. As a small business owner, it can be tempting to do everything from the daily run around to supplies and even your bookkeeping needs. However, there may be more efficient ways to run your business or keep track of your financial inflows and outflows. Handling your bookkeeping needs yourself may be cheap, but it can cost you a lot when your books need to balance.
An excellent way to save time and ensure your financial records are up to date is to hire Honolulu’s trusted bookkeeping service. But before hiring, what is bookkeeping, and how can it help you run your business better? This article looks to answer those questions you and every other small business owner have about bookkeeping.
What Is Bookkeeping?
Bookkeeping involves recording, organizing, and storing business transactions (including inflows and outflows) for an organization, business, or company. With the introduction of technology, bookkeeping has also expanded into collecting relevant financial data to support a business’ operational performance.
What Does A Bookkeeper Do?
As a business owner, you need to know the role of each member of your team to ensure you are using money effectively. A bookkeeper handles the company’s financial records, ensuring that all inflows and outflows are accurately recorded and financial records are updated.
Some of a bookkeeper’s tasks include;
- Recording daily business transactions
- Product or service invoicing
- Payroll processing
- Accounts receivable monitoring
- Reconciling bank and credit cards
- Passing various adjusting journals
- Monthly or bi-monthly financial reporting and tax return preparation.
In addition to the tasks above, the bookkeeper may be responsible for other tasks, including finding the best accounting software for spending tracking, invoicing, financial reporting, etc. The bookkeeper can also give financial or operational advice based on the business’s financial strength, helping the business owner cut unnecessary expenses and improve profitability.
Is Bookkeeping The Same As Accounting?
No. Bookkeepers and accountants are different, and so are their job descriptions. Although both professionals deal with accounting records and financial management, there are a few key differences in the otherwise overlapping fields.
A bookkeeper wears many hats, including organizing, reporting, and recording financial transactions. They also go the extra mile to offer training to clients on the use of accounting software, implementation of document management and inventory control processes for improved efficiency, POS adoption where needed to improve business growth and customer service, as well as the development, implementation, maintenance, and review of internal business processes for improved profits.
It is important to note that a bookkeeper and an accountant can work together within the same organization. In fact, this may be the key to unlocking a better business perspective on how to drive growth, cut losses, and maximize profit.
How Bookkeepers Help You Run Your Business
Bookkeepers are valuable additions to any small business. They help business owners track and understand their finances. Hiring a bookkeeper also offers other perks, including the following;
Allows You To Concentrate On Your Business
Handling so many aspects of your business at once can be overwhelming and tiring. With financial information, you may forget to log certain entries, affecting your overall accounting at the end of the week or month.
Business owners can eliminate the stress of keeping tabs on their daily transactions by hiring a bookkeeper. With a bookkeeper handling this aspect of your business, you have more time to brainstorm and develop new business strategies to drive sales and revenue generation.
Reduce Accounting Costs
Small businesses don’t necessarily need an accountant to manage their books. A bookkeeper is a cost-effective add-on to the business as they can work remotely or on-site at a fraction of what an accountant costs.
Keep An Extra Pair Of Eyes On The Cash Flow
Sometimes business owners tend to exaggerate their business’ health. Hiring a bookkeeper is an excellent way to understand how healthy your business’ finances are. A bookkeeper can bring an extra pair of professional and trained eyes to your business, ensuring you understand where your business is bleeding and how to stop it.
Your bookkeeper also manages the cash flow, helping you to understand how liquid your business is and advising on your eligibility for loans or financing when the time comes.
Stay In Control Of Your Financial Data
Many small businesses cannot afford to hire their own accountants. Those with accountants may also be at risk, especially if their accountants leave mid-month without the necessary financial reports prepared.
A bookkeeper will often use software solutions you have access to, ensuring that you can pull up all the needed financial information about your business in a jiffy and without worries. This flexibility can make the difference between making a sales pitch to an impromptu potential investor and a disappointing meeting.
As a business owner, the benefits of hiring a bookkeeper are immense. You too can enjoy those benefits by outsourcing to a professional bookkeeper.