Why Can Bookkeeping Services Benefit Any Business? 

Why can bookkeeping services benefit?-  First of all, that’s a million-dollar question. Second of all, the answer to this question is quite broad, super interesting, and will immensely help you if you are thinking of starting a business but do not have a background in business and accountancy. We are gonna explore this question in this blog and by the end of this read, you’d fully understand why bookkeeping is so necessary.  

Business bookkeeper

What is the difference between bookkeeping and accounting?

The textbook term for bookkeeping is the process of recording your company’s financial transactionsinto organized accounts regularly. In simpler words, it is recording and organizing all sorts of financial transactions that are associated with that business. 

The textbook term for accounting is the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. In simpler words, accounting is analysing the financial records associated with the business and providing a full view picture of its financial health. 

So, by definition, it’s very clear that accountancy itself cannot do a business any good without bookkeeping. The financial transactions need to be recorded accurately and thoroughly and organized neatly for an accountant to provide you with information about the business’s financial standing. 

History of Bookkeeping 

I thought it’d be a cool segment to add. So let’s learn briefly about the history of bookkeeping.

Born in 1447, Luca Pacioli, an Italian mathematician, is known as the father of accounting. He was the first person to publish detailed material on the double-entry system of accounting which is said to be based on procedures in use by Venetian merchants during the Italian Renaissance. 

In 1494, Pacioli published “Summa de Arithmetrica, Geometrica, Proportions et Proportionalita (Summa).” Effectively, he introduced double-entry bookkeeping and accounting to the world. Today, many use Pacioli’s core bookkeeping and accounting principles to streamline business finances.

 What Do Bookkeepers Do?

A bookkeeper is responsible for the following-

  • Complete data entry and collect transaction details for incoming and outgoing bank accounts
  • Use bookkeeping software, spreadsheets, and other databases to post up-to-date financial transactions
  • Track debits and credits for each account
  • Generate financial reports, such as balance sheets and income statements
  • Maintain and monitor financial records for accuracy
  • Reconcile or report any discrepancies in financial reports
  • Produce or pay invoices for credit card bills or inventory orders
  • Complete payroll
  • File tax returns

The burning question: Is Bookkeeping even needed at your business? 

It aims to serve as a reliable measure of a company’s financial performance. It also provides information to make general strategic decisions and a benchmark for its revenue and income goals. It is more or less a must to invest capital and time in maintaining proper and accurate financial records. 

Let us now in-depth find out why- 

Point#1 Budget Better 

Bookkeeping puts all of the business’ debits, credits, cash flow, etc, into perspective which allows the management team to plan budgeting in a way that is likely to help them achieve the business’ financial goals. It puts forward the actual and accurate numbers and graphs which ensures that no working capital gets lost in translation. 

Point#2 Filing Taxes becomes less Stressful

Everyone despises filing taxes (if you don’t, you are an alien, trust me). If we ask ourselves why filing taxes is the worst job on this planet, the answer will be that it’s because filing taxes requires you to go through all your transactions, assets, credits, tragic incidents, traumas, etc. And bookkeeping just does all of this for you even before the thought of filing taxes crosses your mind. That’s how cool bookkeeping is, you see. 

Point#3 Records appear as Organised as your Digestive System 

Not the most pleasing analogy but you get the idea. 

We know very by now that bookkeeping is keeping records of your financial activities and that it is also organising those records. A bookkeeper knows very well exactly what sort of sorting would keep your business sorted, and they sort your transaction just in that sort. Efficient bookkeeping ensures that you can locate your transactions quickly and have all the important information at the tip of your finger. 

Ps. Heartfelt apology for the pun. 

Point#4 Targets Appear Clearer (sadly not nearer)

As I earlier mentioned, bookkeeping provides you with accurate figures which help in a better understanding of the financial health of the business. These figures have even more functions. 

 They say that good goal setting requires your goal to be quantifiable, bookkeeping helps you with exactly that. It gives you figures, and the exact quantity which gives a clear demonstration of the financial situation and helps the team formulate different plans. 

Point#5 Better and More Strategic Planning *evil laughing noises* 

Continuing to the previous point, the records, the figures, and organisation that bookkeeping results heavily contribute to the planning of future financial decisions. It helps immensely in understanding the profits, the loss, the cash flow, liabilities, and everything in the form of numbers. Accountants produce plans and give advice based on their analysis which is made out of the records that bookkeepers keep and make.

Bookkeeping does the malicious task of keeping records and organising these records in efficient ways. They also present the summary of these records in the form of numbers for the business directors to understand easily without losing many brain cells on comprehending millions of bills and financial statements. Bookkeeping is the foundation on which accountancy stands. Without organised and accurate records, the job of an accountant is deadly. Bookkeeping also helps the management in strategising their financial goals and plans. And the best part is, that it makes filing taxes so much easier. It makes so much sense that bookkeeping is a service recommended to all kinds of businesses. It is indeed tremendously helpful and deserves some investment. 


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