Frequently Asked Questions about Bookkeeping

Bookkeeping generally comes up with a lot of Questions! 

Bookkeeping has evolved in the past few years. Gone are the days when the only record keeping was done by hand. Today, technology has advanced to the point where keeping records is as simple as typing it into a program. Despite this, there are still many unanswered questions related to bookkeeping. Bookkeeping is a complex topic that requires a lot of study and dedication to become good at. However, this doesn’t mean that you can’t get started in bookkeeping right away. 

We have compiled some of the most frequently asked questions we receive about bookkeeping in this article.

So Let's jump to!

 

 

 

What is Bookkeeping?

“Bookkeeping is the process of recording, analysing and interpreting the financial transactions of a business or individual.” Bookkeeping is a fundamental part of running a business. This not only helps our clients better manage their day-to-day operations to enhance the quality of their decision-making, but also improves their experience in managing their business and enables them to better evaluate the best strategy for their future growth. Bookkeeping provides a comprehensive partner experience that educates our clients on their business, systems, operations and results. 

A good bookkeeper can be a huge asset to your business. They have the knowledge, experience and passion to manage your records accurately. Most importantly, they provide you with an important insight into your business’ operations and profitability. Bookkeeping services help you better understand your financial situation and the impact of your decisions on your bottom line.

 

What is difference between Bookkeeping and Accounting?

Bookkeeping is the recording of financial transactions of a business, which allows for the tracking and understanding of money being spent and money being earned. It is the recordkeeping function of a business, and is responsible for generating reports, keeping track of cash, and ensuring that the correct transactions have been recorded in the ledger.

Accounting is the interpretation and analysis of the financial data of a business, which enables the business to make informed decisions about the direction of the business and the best strategies for future growth and development.

 

Both are extremely important for every business, especially when used together. As such, the knowledge and skills required to be a good bookkeeper are similar to those required to be a professional accountant. However, the professional accountant gives the analytical understanding and strategic insight required to sustain and develop a business. Both are valuable in helping a business to operate efficiently, and are often used together to provide greater insight and value to the decision-making process.

 

Which is the best Bookkeeping Software?

We’ll always recommend the best software for you and your business, but we also understand that sometimes you just need a software solution to keep your books and records. That’s why we work with Xero, Quickbooks  and other softwares to manage finances and accounts to meet the needs of our clients’ businesses.This is because the right software for your business is based on your unique circumstances and requirements.

The single-source software reduces the need to do double-entry bookkeeping, so you can free up both your time and mental capacity for other important tasks. Therefore, We are here to help you get your finances under control, not to add more work to an already busy schedule. Our team will help you determine the best way to keep track of your business finances, so you can make better decisions about your money. 

 

Can Bookkeeping be done Remotely?

Managing your finances is easier than ever with the power of the cloud. Your bookkeeper can manage your books remotely, but you can also access your own real-time data, financial information and reports. Gone are the days of paper-intensive accounting and complicated spreadsheets. Today’s cloud accounting software makes managing your finances easy and accessible from any device. You’re never limited to the office or the comforts of your home, and your bookkeeper will take care of your books, so you can focus on the things that make your life better.

Cloud-based services enable your access to information whenever and wherever you need it as well as providing the security and data-loss prevention, which is essential protect your most important data. Over the years, you’ve probably accumulated piles of paperwork from your business. Things like invoices, receipts, job applications, contracts, and more. It can be hard to keep track of all of it. And when a mistake is made, there’s no way to go back and correct it.

Say goodbye to piles of paperwork you don’t understand and embrace a paperless business. We’re experts in multiple accounting software platforms and apps and can guide on your journey to a paperless business.

 

What are the Responsibilities of Bookkeeper?

• Cash flow management
• Compliance and reporting
• Budgeting
• Invoicing and receipt management
• Profit and loss reporting
• Maintain financial transactions
• Streamlining current systems
• Setting up bookkeeping software
• Online banking
• Recording debits and credits
• Run payrolls
• Generate invoices and make payments
• Data entryUpdate and maintain general ledger
• Expense tracking
• Business planning
• Accounts payable and receivable
• Transactional checks and bank reconciliations

 

How can a Bookkeeper help the Business?

A bookkeeper will keep your books in order so that you and your accountant can get a clear picture of how your business is doing. The bookkeeper can advise you on how to increase your profits, how to manage your cash flow, and how to prepare your tax returns. Bookkeepers also manage all of your financial records so that you can focus on growing your business instead of worrying about how your books are doing from a bookkeeper’s perspective.

Read more: Labour market continues to recover

Bookkeepers help the company keep track of its financial information and help ensure that the transactions being made are accurate, legal, and compliant. To do this, they will keep track of all of these transactions, issue you reports for them, help you analyze your financial reports, and advise you on how to maintain your books.

 

What is Double Entry Bookkeeping?

The double entry bookkeeping system is the most common method for keeping track of a business’s finances. Every transaction involves two accounts:

1. Debit indicates incomings
2. Credit indicates outgoings

This system gets its name because you enter all transactions twice: once to record the transaction itself, and again to record the corresponding entry in the other account. This pattern is how you record all financial transactions, large and small.

Double-entry bookkeeping is the method by which transactions are recorded in a financial account ledger. This method of recordkeeping ensures that the accounting equation (which defines the relationship between assets, liabilities, and equity), always stays in balance i.e assets = liabilities + equity 

This system of bookkeeping is used in commerce and other financial organizations to minimize the occurrence of errors and increase the chances that your accounts balance. Bookkeeping is the process of. Bookkeeping is a critical part of any business, as it helps to ensure that cash is being spent and income is being made and help in keeping track of a business’s financial records

 

Can a Bookkeeper also work on Payrolls?

When you engage a payroll service or bookkeeper to help with payroll processing and calculations, your stress levels will drop. A professional bookkeeper will check your payroll-related tasks and manage your payroll on your behalf so you can keep your focus on what matters most in running your business.

Your paycheck isn't the only important thing that your bookkeeper is responsible for. It's also worth their time to make sure that your payroll is well-designed and that you and your bookkeeper are on the same page when it comes to payroll tax, retirement, and benefits. If your bookkeeper is new to payroll processing, they should work with you to understand the nuts and bolts of your payroll system. In other words, it's important to understand what a payroll system is, what it does and how it works.

 

What are Key Monthly Checklist tasks of Bookkeeper?

A good bookkeeper will analyze these listed tasks monthly:

• Cash position
• Update bookkeeping software
• Review customer and vendor invoices
• Check aged accounts receivable and accounts payable reports
• Calculate and record sales tax
• Review your inventory
• Forecasted cash flow
• Open client and vendor report
• Management of time and growth

 

Stay on top of your Bookkeeping

One of the biggest challenges for small businesses is keeping track of finances and records. That’s where bookkeeping comes in. Carrying out bookkeeping properly is critical to running a business. To get the most from bookkeeping, though, it’s important to have someone managing your finances with an eye towards efficiency and accuracy. This is where the bookkeeping professional comes in. A bookkeeper is responsible for the proper documentation, processing and review of financial data for your business.

When you partner with the Anderson Ross-Accountancy and Finance Consultants, you become a part of a community of like-minded entrepreneurs and gain access to professional advice and services that help you grow and succeed. 

Feel free to contact us if you have a question, that isn't answered in the list above! We'll be happy to respond as soon as possible.

Written by Harry Arthur