Emerging business owners are often told that they should hire professionals to help with the accounting side of their companies through bookkeepers and accounting services. But who are they exactly? And what do they exactly do?
Bookkeeping is actually the process of analysing, recording and interpreting the financial transactions of a business or individual. Bookkeeping is a large process which falls under the category of accounts.
Defining their duty
The duty of a bookkeeper is to set up financial statements so that an accountant can easily perform legal and tax management within time. A skilled and compliant bookkeeper can produce financial records that give a business its perfect information about the financial activities. These records are critical to the future success of any business. To maintain the accounts of a business properly and in a legal manner, the records from a bookkeeper are very essential. U.S legislation affirms that businesses should maintain up to date financial records to ensure that they pay all necessary taxes and levies.
Records must be accurate and true for a period of at least 5 years from the date that the documents were prepared, obtained or the transaction completed. Even the records of payroll, must be kept for a minimum of 7 years.
A good contract bookkeeper can provide:
Proper accounting systems and software
General business administrative support
Ensure they are up to date with the legislative requirements and management reports
Perform checks and year end processes
Undertake payroll duties and compliance
The difference between bookkeepers and accountants
Most people assume that bookkeepers and accountants are the same. But actually, what reports say is, many bookkeepers start their careers as data-entry clerks or entry-level bookkeepers. Through experience and merit, they gradually gain knowledge about financial recording. To explain it simply, a bookkeeper is literally a person who maintains the books and retains documentation for transactions.
Experienced and certified providers of bookkeeping services in Arlington can eventually become accountants, provided that what a bookkeeper does and call him/herself is dictated by a state accounting board. An accountant can also focus on business analysis, reporting and processes, and possibly offer expert advice to business owners.
Maintaining financial records on your own is a big hassle. Smarter people will opt to hand it over to the professionals who are adept in these jobs.