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Bookkeeping Is An Essential Part Of Money Management In Business
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For Your Small Business May 20, 2022

Bookkeeping Is An Essential Part Of Money Management In Business

Every business owner needs to keep accurate and timely accounting records, so good bookkeeping is a vital part of the business. Bookkeeping builds the business's financial foundation, and that financial foundation is where you base your business decisions.

The goal of a business is to have current, organized, and reliable recordkeeping of the company that the owner can rely on. Critical business decisions are made from the output of accounting records, so ensure you are hiring the best talent for your team.

Bookkeeper vs accountant

A bookkeeper is not the same as an accountant. A bookkeeper is responsible for the data entered into the accounting software. Bookkeeping is responsible for the day-to-day transactions of a business, such as invoicing, paying bills, and entering and categorizing expenses.

An accountant is a professional that has more educational training than a bookkeeper and usually has a business degree. Accountants have taken accounting courses that go in-depth on financial management. They are typically responsible for account analysis and offering financial guidance and advice for your business.

Many small business owners mistake a bookkeeper for an accountant and expect more from a bookkeeper than they are qualified to do. If you require more advanced financial guidance from a professional, it may be time to consider bringing a fractional CFO to your team.

Why hire a bookkeeper?

When you are a business owner, it's hard to keep up with all the tasks required to run a profitable business. Therefore, you need to delegate tasks to spend your time on more critical tasks, such as creating a profitable business.

You need to hire a reliable bookkeeper who is familiar with the Generally Accepted Accounting Principles (GAAP) so that they enter your financial data with reliability and accuracy. Credentials are necessary because you want an accurate financial foundation from which you run your financial reports.

Having accurate financial reports is essential in business as you base your business decisions on these reports. If you make decisions based on wrong information, that will put your business at risk.

Benefits of good bookkeeping

Bookkeepers are entering the financial data of the business. Essentially, they lay the financial foundation on which all your financial reports are generated. It would be best to have a trustworthy financial foundation to have accurate financial statements. If there are errors in your bookkeeping, there will be errors in your financial reports.

What to look for in a bookkeeper

You want to be sure you hire a qualified bookkeeper, as bookkeeping mistakes can be costly. Ensure they have experience in your industry and a general understanding of GAAP.

The bottom line is that bookkeeping mistakes can be costly, and hiring the right bookkeeper for your small business is essential. Don't make a mistake and hire the cheapest bookkeeper believing that bookkeeping is strictly data entry. Hire a qualified and knowledgeable bookkeeper who will set your business up for success.

When looking for a good bookkeeper, you can get referrals from your tax accountant, colleagues, and network. Hiring a bookkeeper who has experience in your industry will also be helpful.

 

This article was written by Melissa Houston from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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