Bookkeeping Service Edmonton
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Keeping Track of Financial Transactions
Bookkeeping has been around since ancient times. Of course, the job looks a lot different now than it did back then! There have been businesses of one shape or another since we began to trade with one another. It might not have been for currency, but there was a payment system in place regardless.
All companies have one similarity. They have transactions with others and currency is trading hands. It doesn’t matter if you are trading sheep or selling wool mittens. There are funds coming into the business and funds flowing out of the business. Without a system in place to track all of this, it leaves the businesses not having any idea on how it is performing. Are you spending more than you are bringing in? That’s a recipe for trouble. Or are you sitting on piles of cash that could be used to expand? How can a business owner make informed decisions without knowing how the business is from a financial stand point.
Bookkeepers come equipped with the understanding of tracking financial transactions and recording them in ledger accounts. The system they use is common for all accounting practices. Accounts will represent assets, liability, and equity. There will be accounts that reflect gross sales and accounts reflecting the cost to generate that sale. The structure of these accounts will be consistent from business to business so that financial results are comparative. Imagine, without a set standard, how difficult it would be to compare or analyze performance between businesses!
Being a business owner, your focus should be on getting it up and running. A bookkeeper will help you with all the financial tracking that needs to be done. You shouldn’t have to dedicate time to those tasks, when your time should be used to generate your income. We should say that having a bookkeeper to track your financial transactions does not replace the need for an accountant. The benefit of having a bookkeeper is to record the daily activity that will be handed off to an accountant at tax time. Accountants are more suited for strategic planning for the future. Bookkeepers are important to ensure the daily transactions are recorded correctly, so the accountants can get an accurate picture from that data. So, what kind of daily activities can you expect a Bookkeeper to take off your plate? Let’s take a look at that.
A bookkeeper will take care of your account receivables for you. They will invoice out any sales made on customer accounts. And record the receipt of payment of invoices by your customers. They can really assist with cash flow, by ensuring invoices are sent out as soon as possible after fulfillment. And follow up with customers who are tardy on paying their invoices.
They will monitor your accounts payable so that you don’t miss making payments to your vendors on time. They can help you not incur late payment fees. They can keep track of all payments coming up, such as loan payments, credit card payments, and help maintain your good credit standing with lenders. They will monitor and reconcile your bank accounts. They can also manage any bank deposits for you. They will monitor the cheques that have been cashed and reconcile the outstanding ones. This will really assist you, knowing exactly what your cash position is.
They will also assist you with remitting required deductions and taxes to the government as they come due. This can be GST, Corporate Tax Installments, and Payroll Taxes. They will be equipped with the ability to produce 4 standard financial statements. These are Income Statement, Balance Sheet, Cash Flow Statement, and Statement of Retained Earnings. These statements can be very valuable to a business owner, as a snapshot of how the business is looking any given month. Or compare statements to prior similar periods.
There will be a lot of trust required – between yourself and your bookkeeper. They will have access to a good deal of financial information. They need access to be able to produce accurate results. But they also need to respect the confidentiality of this information. They need to protect account numbers, passwords, logins, and even blank cheques. A responsible bookkeeper will always keep your business matters secure.
There are many bookkeeping services offered in every city and town now. With web-based software and remote access, the need to have a bookkeeper in the shop or site might be a thing of the past soon. Depending on the size of your company, you may only need part time services. Or if you have a larger business, there are bookkeeping services that can be customized to your needs.
Regardless, often online platforms used make this function for owners much easier and convenient. We encourage you to reach out and discuss your bookkeeping needs with us. You may soon discover why so many businesses depend on their bookkeepers!