What Does a Bookkeepings Service Do?
If you are wondering what a bookkeepings service does, what types of services are provided by bookkeepers, or how much you can expect to pay for bookkeeping services, this article is the place for answers. On a side note, the word “bookkeeping” must be one of the oddest in the English language, what with its double Os, double Ks, and double Es, all in a row. Ahh well, moving on.
First off, it’s important to note that bookkeepers and accountants are different, and the training and education required for both are quite different. As a rule, accounting professionals, or Certified Public Accountants, require more education than bookkeepers do, even though bookkeepers may possess many or all of the same skills. Accountants are more qualified to provide analysis of your financial picture, and base advice on this analysis.
Bookkeeping service companies, on the other hand, provide more of the hands-on, day to day service of making sure your firm’s books and account statements are up to date. They will often also provide payroll services, maintenance of your ledgers, reporting such as profit and loss statements, balance sheets, and more. They can also help you with more mundane tasks, such as balancing your checkbook, and initial setup of a bookkeeping system for a new business or startup.
If your bookkeeper also provides payroll services, they can handle things like creating W2 and 1099 statements, payroll tax withholding, and 940/941 IRS filings. Some bookkeeping service firms even provide employee benefit services. A firm that does all of these things would definitely be considered a full-service bookkeepings services company.
For some business owners, this kind of complete, soup-to-nuts approach is important. Some business owners don’t know the difference between accounts payable and accounts receivable, and many simply do not want to be bothered with the intricacies of keeping their own books or doing their own accounting. Most bookkeepers will work hand-in-hand with your accountant to make sure that your financial picture is healthy, that your tax filings are in order, and that your payroll withholdings are above board.
A good, qualified bookkeeper can often take one look at your books and gauge the financial health of your business. From there, he can make recommendations on how to improve your financial picture, how to be more compliant with federal and state government regulations, and how to save money on your monthly expenses and taxes. Many bookkeepers will also help your with weekly and monthly budgeting, teach you how to read and prepare a financial statement, equip you to qualify for loans and credit lines, and show you how to improve your business’s day-to-day cash operations.
Maybe, like too many entrepreneurs, you’ve been ignoring your company bookkeeping system. A bookkeeping services firm can help you regain control and catch up ignored books and accounting systems, and clean up existing bookkeepings. In the end, every effective business owner should know how to read and understand a balance sheet, and a good bookkeeper can help you do exactly that.