Bookkeepers maintain accurate records of income and expenditures for your business or organization. They do this by keeping receipts and itemizing expenses that they label; they record who has been paid and how much was paid. Also, bookkeepers keep track of incoming payments and often issue invoices. Most importantly, bookkeepers assume the responsibility of assuring that your company’s records are in order and any deductions are legal. These employees are essential to your business as they will ensure that your company’s records are complete, accurate and orderly and any deductions are legitimate, all of which are important at income tax time.
The Advantage of Having a Bookkeeper
Nowadays, bookkeepers make use of a software platform for keeping records of your company’s finances. They also need a certain degree of legal know-how, although they usually pass their records to your accountant when it is tax time or if there are significant business decisions to be made. After all, bookkeeping is relatively straightforward, whereas accounting demands more legally orientated personnel because it involves interpretation that is lawfully and mathematically skilled. Nevertheless, bookkeeping is more than simple record keeping. For, it takes carefully scrutinized analysis and some legal awareness to be a competent bookkeeper. Good bookkeepers can help your business survive audits by the IRS by ensuring that your business records are in order and all deductions are legal.
The Duties of a Bookkeeper
Bookkeepers prepare four primary financial statements:
1. Profit and Loss Statement
This record shows your company’s incoming revenue and expenses over a specified period.
2. Balance Sheets
These are records of your company’s position at one particular point in time.
3. Statement of Recognized Loss and Gains (Changes in Equity)
This sheet displays how your reserve capital, share capital and retained earnings have changed during a reporting term.
4. Cash Flow Statement
This statement is a record of the actual cash and cash equivalents (also called liquid assets that can easily be converted to cash) that enter and leave your company.
5. Gains and Losses Statement
This sheet is a record of the changes in your reserves, share capital and retained earnings over a designated period.
Other Reponsibilities of Bookkeepers
1. Reconcile accounts each month by comparing your financial account statements with your company’s accounting spreadsheet to ensure that they agree.
2. Maintain your yearly budget and make payments on any debt of your company’s when it is due.
3. Produce financial statements and provide the accountant with accurate financial statements at tax time.
4. Report any irregularities or issues when they occur
5. Process your company’s payroll
The Importance of a Competent Bookkeeper
Bookkeepers are essential to the financial organization of your company and they allow you, as a business owner, to pursue the growth of your business without worrying about maintaining it.
Bookkeeping Service Flower Mound TX
The bookkeeping service Flower Mound TX can provide you the peace of mind for such business growth pursuits. Master Plan Tax Services will provide your company with a competent bookkeeper who can serve your needs and provide you the software to ensure organized and up-to-date accounts.