Owning a business or being in a position where you’re responsible for running one can be a very demanding and also rewarding experience. According to the Small Business Administration, over 30 million people owned businesses in 2020 in the U.S. While there are many decisions to be made and guidelines to follow, there is great earning potential and accomplishment when growth and success are achieved.
To make managing everyday tasks easier and to ensure financials are in line with regulatory compliances, it’s crucial to employ professional bookkeeping services.
The purpose of bookkeeping is to create a record of financial transactions that are organized in a way that allows you and your accountant to analyze the business financial data, run financial reports, and prepare for taxes.
In this post, we’ll focus on 3 of the important functions a bookkeeper can assist businesses with.
If you need bookkeeping services for your business, DOAAR is a full-charge firm offering customizable services at competitive rates.
Perform Transaction Categorization
Understanding what items your business is spending money on is essential not just for tax reporting but also for business optimization tactics. A bookkeeper will ensure all receipts are entered and appropriately tracked and then categorized for easier reconciling with bank statements each month. Categorizing your expenses makes it easier to decide which items can be included for deduction come tax season and alleviate last-minute scrambling through shoeboxes of receipts for purchases from the year.
Create Monthly Reports
Understanding what’s happening in your business each month is essential. If you’ve ever tried to figure out why so much money is going out or why there’s money coming in, but you do not see it become a profit, then utilizing bookkeeping services can help you figure this all out.
Monthly, quarterly, and yearly reports can give you an overview of how things are going. How much money you made and where there are areas to improve. These reports often referred to as profit and loss statements or an income statement, lay out for you, your total income, total costs, expenses, and net income. Armed with these reports, you can make strategic decisions about your next steps.
Assist with Tax Filings
Together with an accountant, bookkeepers ensure you comply with all tax requirements. This includes compiling and providing all forms and reports from the entire year such as employee payroll information and vendor invoices. The accountant will then use this data to file the taxes for the year on behalf of your business. Being prepared for a possible audit is another crucial reason to have professionals on your side. When that time comes, you’ll have all the documentation and records needed to make that audit quick and painless.
Trust a bookkeeping services provider with a strong reputation for accuracy and trust. Call DOAAR Today!