What is Bookkeeping and What is the Need of Bookkeeping
What is Bookkeeping
Bookkeeping is the process of recording of financial transactions in part of the process of accounting in business. These transactions include mainly purchases, sales, receipts and payments by an individual or by an organization. Bookkeeping is usually performed by a bookkeeper. A book-keeper is a person who records the day-to-day financial transactions of an organization and is responsible for writing the "daybooks" of the organisation.
What is the Need of Bookkeeping?
The main reason behind bookkeeping is to keep track of an organisation's income and expenses, thereby improving chances of making a profit and to collect the necessary financial information about organisation's business to file various tax returns and local tax registration papers. Bookkeeping helps in getting accurate financial statements, to keep track of deductible expenses and Prepare tax returns.
The actual process of bookkeeping is easy to understand when broken down into three steps.
1. Keeping receipts and other acceptable records of every payment to and every expenditure of business.
2. Summarize organizations income and expenditure records at certain time period.
3. Using summaries to create financial reports that will represent specific information about business, such as monthly profit.
Records to be kept in bookkeeping
It depends on the type of of business which is being operated, affects the type of records that need to kept for federal tax purposes. One should set up their books using an accounting method that clearly shows their income for selected tax year. If there are more than one business, then one should keep completely separate records for each business.
Advantage of outsourced bookkeeping services
1. Budget Monitoring: To compare actual results with projected the companies require an accurate report of current spending and revenue in the annual budget. Bookkeeping system facilitates up-to-date company financial information also it can be cross-checked with the budget to make sure that the company is not overspending.
2. Financial Comparison & Cash Management Benefits: Certain benefits of cash management include the ability to manage supplier and customer accounts by seeing them on paper, create a business budget, and track deposits and payments. To analyze spending and revenue at time bookkeeping of business is necessary. The data can be grouped by the week, month, quarter or year to be analyzed and compared to past years.
3. Business Decision Benefits: Bookkeeping services offer benefits which helps in making smart business decisions such as to identify money-making opportunities, avoid cash-flow problems, and find ways to increase income or decrease spending
4. Risk-Reducing Benefits: The risk associated in business is minimized by bookkeping that can detect fraud and embezzlement. One organisation is may not be worried about, but there's always a chance that business will experience fraud or embezzlement if it has employees or business partners. By hiring a bookkeeper instead of doing it yourself, keep tabs on the bookkeeper to make sure he's doing an honest job.
5. Tax Deductions: bookkeeper makes system easier to report revenue for tax filings at the end of the year.
6. Payroll Services: Bookkeeper regularly checks the accuracy of each payroll period to make sure that each employee receives the proper amount
Bookkeeping is the process of recording of financial transactions in part of the process of accounting in business. These transactions include mainly purchases, sales, receipts and payments by an individual or by an organization. Bookkeeping is usually performed by a bookkeeper. A book-keeper is a person who records the day-to-day financial transactions of an organization and is responsible for writing the "daybooks" of the organisation.
What is the Need of Bookkeeping?
The main reason behind bookkeeping is to keep track of an organisation's income and expenses, thereby improving chances of making a profit and to collect the necessary financial information about organisation's business to file various tax returns and local tax registration papers. Bookkeeping helps in getting accurate financial statements, to keep track of deductible expenses and Prepare tax returns.
The actual process of bookkeeping is easy to understand when broken down into three steps.
1. Keeping receipts and other acceptable records of every payment to and every expenditure of business.
2. Summarize organizations income and expenditure records at certain time period.
3. Using summaries to create financial reports that will represent specific information about business, such as monthly profit.
Records to be kept in bookkeeping
It depends on the type of of business which is being operated, affects the type of records that need to kept for federal tax purposes. One should set up their books using an accounting method that clearly shows their income for selected tax year. If there are more than one business, then one should keep completely separate records for each business.
Advantage of outsourced bookkeeping services
1. Budget Monitoring: To compare actual results with projected the companies require an accurate report of current spending and revenue in the annual budget. Bookkeeping system facilitates up-to-date company financial information also it can be cross-checked with the budget to make sure that the company is not overspending.
2. Financial Comparison & Cash Management Benefits: Certain benefits of cash management include the ability to manage supplier and customer accounts by seeing them on paper, create a business budget, and track deposits and payments. To analyze spending and revenue at time bookkeeping of business is necessary. The data can be grouped by the week, month, quarter or year to be analyzed and compared to past years.
3. Business Decision Benefits: Bookkeeping services offer benefits which helps in making smart business decisions such as to identify money-making opportunities, avoid cash-flow problems, and find ways to increase income or decrease spending
4. Risk-Reducing Benefits: The risk associated in business is minimized by bookkeping that can detect fraud and embezzlement. One organisation is may not be worried about, but there's always a chance that business will experience fraud or embezzlement if it has employees or business partners. By hiring a bookkeeper instead of doing it yourself, keep tabs on the bookkeeper to make sure he's doing an honest job.
5. Tax Deductions: bookkeeper makes system easier to report revenue for tax filings at the end of the year.
6. Payroll Services: Bookkeeper regularly checks the accuracy of each payroll period to make sure that each employee receives the proper amount
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