When you hear the word business, what’s the first thing that comes to your mind? I would bet it is money, right? Money makes the business exist. Money makes the business run. Business money demands good management. With business money follows accounting.
Accounting is vital to any business’ existence. The law requires business to submit their financial report annually. Financial report is the end product of accounting. Accounting involves many tedious tasks and one of these tasks is bookkeeping. Records needed by the accountant are obtained from a thorough bookkeeping.
Bookkeeping is the process of recording the daily financial transactions which includes income, sales, purchases and payments being part of business operation. It is considered the most tedious task and requires considerable amount of time. It is normally performed by a bookkeeper.
The bookkeeper is dubbed as the financial record custodian. He or she is the one responsible in updating and maintaining the book of accounts or accounting records. The task involves calculation of expenses through official receipts, accounts payable and receivables including profit and loss.
Despite being designated at the lowest section of the department, the role of a bookkeeper is the most important in all systems of accounting. They are the ones who prepare the records for the accountant. Much of their work is similar to that of an accountant. Only that they are more involved in the daily financial operation of the business while accountants take the information provided by the bookkeeper to produce year-end accounts and tax returns.
In small businesses, the bookkeeper takes care of the general ledger. Financial statements and reports are also prepared by bookkeeper including summaries needed by supervisors and managers. Bank deposits are also prepared by the bookkeeper. Necessary data are gathered from cashiers, then they verify and balance receipts and finally send the cash or check to the bank. In addition, bookkeeper also performs required purchases, sets-up invoices and keeps track overdue accounts.
Aside from maintaining the sales and purchase ledger accounts, bookkeepers are also able to produce VAT returns and construct management accounts. From the works produced by the bookkeeper during the year, the accountant then devise tax strategies, business advisory services and auditing of the clients accounts. There is a thin line between the bookkeepers from the accountant in terms of job description as the latter usually have the skills to perform the job of the former. Still, both are essential to run a business well. The big difference is that the services of the bookkeeper are more affordable than that of an accountant.
Bookkeeping and accountancy compliment each other. If the bookkeeper’s job is not efficient, the work of the accounting associate will be affected as well. This is why it is very important to have a bookkeeper that performs effectively and efficiently like bookkeepers New York. The easiest way to find one is through outsourcing. NYC Bookkeepers can surely give you bookkeepers that have the experience and qualification necessary for your business.
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