- 1 Apr 2021
- Reading time
- 4 minutes
The critical role of bookkeeping in companies of any kind is well known to all. A company's financial stability must be preserved. Each transaction should be monitored and recorded. With appropriate documentation, financial transactions can be much easier to track—from income receipts to payments. When errors occur, the bookkeeping allows reconciling business documents with the bank statement to identify the mistake. Simply put, bookkeeping stabilizes and regulates the company's financial flow.
How do you manage your bookkeeping system? Are you outsourcing the job to an accounting firm or a bookkeeper? Would you prefer to use online software for bookkeeping? Or do you have a bookkeeper in-house? In this article, we will address different categories of bookkeeping services. You can read business-to-business service reviews to find out which bookkeeping companies can serve your needs perfectly. These reviews are posted by individuals and groups that have used a bookkeeping service online. You can also read other online service company reviews to know the different services available.
What is Bookkeeping?
Bookkeeping is the method of tracking the financial statements of companies; it is a part of the accounting process. It involves the preparation of source documents for all operations, transactions and other business activities. Transactions include sales, receipts and payments made by an employee or a company.
Bookkeeping services for small business
Running a business can be unpredictable, but an excellent record-keeping system can make things easier. Many start-ups and existing companies ignore this aspect of their business until the end of the financial year (EOFY) approaches. You must deal with numbers from the moment you start a company. Every company, no matter how small, needs to keep careful records of all transactions.
Different Categories of Bookkeeping
Local Bookkeeping Company
Local bookkeeping entails the hiring of a bookkeeper or a company that is freelance. An individual or team will report and track your business' financial transactions every day. The two types of local bookkeeping are:
There are freelance bookkeepers with bookkeeping expertise. An individual bookkeeper will work one-on-one for you, mostly online. They work for other companies as well.
Bookkeeping organizations or departments are also available to companies other than yours. Companies typically bill more than a freelance bookkeeper for their expenses. They make guarantees, however, that bookkeepers alone can't. They usually have a bookkeeping unit of certain members assigned to certain regions.
Virtual Bookkeeping Services
Virtual bookkeeping involves the use of software and web services. You can either manage the transaction using a virtual assistant or use automatic accounting software to track and control the company finances. Therefore, virtual bookkeeping combines the best of bookkeeping software with professional bookkeepers.
Please note that virtual bookkeeping fits well for you if you:
● Use online banking and are comfortable on the web
● Want online access to your financials via a mobile app
● Prefer chatting online or on the phone rather than in-person
Digital bookkeeping links you to professional bookkeepers via a secure online account and offers you access to automated bookkeeping apps. The first choice allows you to manually enter data while the bookkeepers can register, sort, handle and measure data to make business transactions transparent, accurate and efficient. The second one allows you to enter the data manually into the system or software while most of the bookkeeping work is carried out with its automatic features.
These are usually internal bookkeepers responsible for all the manual duties. This ensures that there are reliable financial statements, tax-ready books and a safe way to maintain and view financial reports and documents for your business.
Things to check in an online Bookkeeping Software
Before you start looking for a free bookkeeping app, there are a few things to consider. They are:
- General Ledger Management
- Cash Flow Management
- Internet Connectivity
- Financial Projections
- Reporting and Analysis
- Automatic Updates
What Online Bookkeeping Services Offer
Some examples of what bookkeepers do for clients include:
- Preparation of basic financial statements (balance sheet, income statement, cash flow statement)
- Accounts payable management
- Accounts receivable management
- Invoice preparation
- Payroll services
- Tracking long-term assets (e.g., equipment, machinery)
Can I get free tax services?
A bookkeeper may be able to prepare some of the tax forms. Even though bookkeepers do not prepare tax returns, having books up-to-date can bring significant savings. Most companies make promises when it comes to accuracy and refunds, but it's important to check the fine print to ensure none of your details will end up triggering an unexpected charge. For example, some services only offer free tax services for people whose income falls below a set limit. Others only offer one free year of filing, so you'll have to pay more or switch to another service if you used it last year. Keep an eye on any extra fees.
Getting the Right Online Bookkeeping Tools
The bookkeeping software is usually determined by the preferences of potential clients. QuickBooks Online is popular cloud-based accounting software. Zoho and Xero are other choices to consider based on requirements and kind of customers.
Document management software is used to exchange information. Consider what solution(s) will enable you to receive, share, and file documents and data effectively. Examples of tools that can help include Google Drive, OneDrive and Dropbox.
Every business needs an appropriate bookkeeping service to keep track of all transactions. There are different bookkeeping services for different business types and sizes. To choose the perfect bookkeeping service for you, read reviews from other users of these services. Find out what people are saying about these companies.