Every company is required to maintain books of accounts. Every economic event that impacts the business’s finances must be recorded in books of accounts. Though an essential task, maintaining books of accounts can be a major headache for businesses. Maintaining financial records requires a lot of time and effort.

Why Outsourcing Your Bookkeeping Makes Sense

There are several problems with in-house accounting. If you decide to do everything yourself, you will have to hire a team. Hiring a team consisting of a full-time bookkeeper and accountant involves significant costs.

What Do Accounting Firms Do?

To save man-hours, many businesses outsource their bookkeeping to small accounting firms near them. Outsourcing companies provide a range of services and solutions for businesses of all shapes and sizes. They are responsible for maintaining accounting records in accordance with the legal requirements.

Your accounting firm will pass accounting entries every month and also do bank reconciliation. Your outsourcing company will provide you with periodic MIS reports that you can use to make key strategic decisions.

Your accounting services firm will ensure complete statutory compliance in payroll and taxation. The provider will also maintain internal financial control.

Maintaining Books for Small Businesses

Your accounting service provider will conduct periodic reviews of your accounting data and will be responsible for closing the books every month. Before an internal audit, your provider will conduct a meeting with management to discuss any irregularities observed in the bookkeeping process.

If a business maintains its own accounting records, a team from its outsourcing firm will pay frequent visits to the business’s facility. During visits, the team will review the effectiveness of the internal financial control system. Discrepancies, if any, will be brought to management’s attention.

Choosing the Best Accounting Method for Your Business

There are two popular accounting methods – cash basis accounting and accrual basis accounting. In cash basis accounting, an income is recorded as soon as the business receives them. In accrual basis accounting, incomes are recorded when they are earned, and expenses are incurred.

When choosing between these two methods, consider your company’s income and cash flow. If, for example, your revenue is less than $25 million and you do not sell products directly to your consumers, the cash basis system makes more sense.

Tips to Streamline Bookkeeping and Accounting

  • Track your expenses
  • Have a system in place to organize receipts and important records
  • Understand the difference between receipts and invoices. Do not mix them up

Virtual Jeannie Bookkeeping Services is a top-rated bookkeeping firm. We will create a customized bookkeeping solution that fits your exact needs. To talk to a bookkeeping expert, call (707) 664-1425.