Bookkeeping services are crucial to financial management and achieving business goals for small businesses in the USA. Small business owners in Texas, USA have many responsibilities to track and adhere to while trying to grow and meet the company’s goals. A well-organized business structure and accurate entry of all the financial details are important.
The bookkeeping services for small businesses give an overview of how the company is performing in real-time and this helps the business owners make the right decision for their business. The reports maintained will also help in meeting the tax requirements of companies in the USA. Let’s take a look at what bookkeeping services are and understand why it is crucial to outsource the service.
What is Bookkeeping?
Bookkeeping for small businesses is a process of recording and monitoring the financial transactions of any business. It helps in sending the payrolls and invoices at the right time, understanding the cash flow, and other such aspects that help in making the right decisions for the business’s growth at the right time.
What is the importance of bookkeeping?
Bookkeeping services for small businesses in the USA are very crucial for businesses to make crucial financial decisions in the long run. Here are some benefits of accurate bookkeeping for the business.
For well-planned budgeting:
As a small business owner, it is very crucial to accurately and wisely spend the financial resources. With bookkeeping, you can plan the right budget to carry out your business operations instead of overspending. The budget you make becomes a financial roadmap to your business’s growth when you track your financial transactions well.
For tracking cash flow:
It becomes crucial for any business to understand how much money comes in and how much money goes out. Tracking this can give a better analysis of when and how to achieve a break-even for any business. With bookkeeping services, small business owners understand how their business is performing and can make changes in their functioning to see profits.
For tax preparation:
Bookkeeping services in the USA help with the financial information that is required to prepare and file taxes during the tax season. The detailed finance sheets can help the CAs understand how taxes can be saved for the benefit of the business.
For organized records:
It becomes absolutely crucial for any small business owners in the USA to have real-time updated financial records to understand how the business is performing at any point in time. Organized financial records through bookkeeping can be of big help in times of making quick financial decisions for the business.
For better business planning:
Regular updation and maintenance of financial records through bookkeeping serve as the right data that small business owners can analyze and map their business goals accurately. It helps in proper financial tracking and planning for the future of the business.
Methods of bookkeeping
Bookkeeping services in Texas, USA for small businesses are classified into three types or methods. Take a look at what they are.
Single-entry bookkeeping:
- This method of bookkeeping suits small businesses and start-ups.
- All the transactions that are recorded in the bookkeeping services are as debits or credits to one account.
- All the entries are maintained in a transaction book and cheque book register.
- The information that the business owners get from this method of bookkeeping service is limited.
- It becomes to track the credits and the debits of the business and businesses cannot track their financial position.
Double-entry bookkeeping:
- In this method of bookkeeping, the transactions are recorded in at least two accounts as credits and debits.
- The credits are called assets and the debits are called liabilities.
- Assets cover the cash in-flow, inventory, and invoices while the liabilities cover the loans, credit-card debts, and more.
- As the process is quite exhaustive, the bookkeepers use software to track and maintain the records.
Cash-based or accrual-based:
- This is a simpler method of bookkeeping.
- The financial transactions are recorded when the cash flows and when the cash leaves the company account
How are entries recorded in bookkeeping?
There are multiple procedures for making entries in the bookkeeping process. Take a look at it over here.
Cash registers
This is the first entry point. The credits and debits of any company are first recorded in the cash registers or the POS (point-of-sale) systems. If you use bookkeeping software here, the human entries are converted into records.
Journal
This is also called the primary entry book where the business transactions are recorded in chronological order and have details on the dates of cash flow, the amount details, and a description. There is a journal for credits, one for debits, one for sales, and one for purchases
Ledger
The transactions that are recorded in the journals are written down in individual ledgers. These ledgers have information on the assets including cash, account receivables and more. It also has liabilities like loans and accounts payables. For clarity, the debits and credits are mentioned clearly when the entry is made in the ledger.
Trial balance
A report that summarises the ledger balance is prepared at the end of the financial period to show that the total debits and total credits are equal. This report is called the trial balance.
Finance statements
The finalized trial balance sheets are used to prepare financial statements that help small businesses that use bookkeeping services understand their financial health. The statements of cash flow, balance sheet, and profit and loss statements are prepared.
Bank reconciliation:
The bank statements need to match with the recorded transactions in the bookkeeping processes. The ledgers are matched and checked to make sure there are no discrepancies.
Closing entries:
It is important to end a cycle and start a new one with fresh statements. At the end of an accounting cycle, the debits and credits are closed into retained earnings, and the balances are set for a new period.
Who is a Bookkeeper?
If you want to scale your business and ensure you plan finances well, you need to hire a bookkeeper. Bookkeepers are professionals who record and maintain all financial transactions and records systematically. They ensure that the financial records are up to date at all times for effective decision-making and adherence to the tax rules and other business regulations.
How to Choose a Bookkeeper for Your Company
Small businesses are choosing bookkeeping services in Texas, USA to scale their business goals and keep a check on the financial health of the company. The primary criterion is to find a bookkeeper who comes with the expertise to add value to your company.
Expertise
A bookkeeper that you hire must carry the knowledge of not just bookkeeping in Texas but also about the industry that your company is in. He needs to understand your business and know the cash flows correctly. A bookkeeper who is certified can be an added advantage.
Technical knowledge
Multiple software and platforms have been created to make bookkeeping easy and free from human error. The bookkeeper you are hiring must have hands-on knowledge of using integrations, automation tools, and other platforms.
References
The best way to find a good bookkeeper in Texas is to understand the clients they have worked with. Check for verified testimonials and references from other clients. Ensure that the bookkeeper you are hiring or outsourcing is reliable and has the right knowledge about the tax and other rules laid by the law.
What is an Online Bookkeeping Service?
Small business owners in Texas and the USA outsource online bookkeeping services. The bookkeepers use cloud-based platforms and other tools to update the financial records for the businesses in real-time. The business owners outsource experienced bookkeepers and they collaborate online in generating such reports.
What are Outsourced Bookkeeping Services?
The budgets of a small business would not be sufficient to hire a full-time experienced bookkeeper. In such situations, they can outsource bookkeeping services from ethical firms to handle the bookkeeping for the company. This brings down their cost and also helps them onboard an experienced bookkeeper who can record all transactions, process payrolls, make financial reports, and help the company excel in preparing reports that adhere to the tax and other rules.
Benefits of Outsourcing Bookkeeping Services
Bookkeeping Services for businesses in Texas can be outsourced from certified firms. It helps small businesses manage expenses and get the right bookkeeper. Here are some benefits of outsourcing the bookkeeping services.
Bring costs down
A full-time bookkeeper hired in-house will charge up to 5 times the fees of an outsourced bookkeeper of the same expertise. If you hire someone junior, there is an investment in time and money to get them trained. When you outsource a bookkeeping professional, you save the money that you will pay a full-time senior and time that you may spend on training a junior.
Reduces effort
Most of the outsourced bookkeepers are using the latest tools and platforms to perform bookkeeping tasks quickly and accurately. This reduces the manual effort spent by the company on cross-verification of details and helps in making quicker decisions.
Expertise
When you outsource bookkeeping services, you can choose a bookkeeper who aligns with the industry your company caters to and brings the experience of working for companies similar to yours. With this expertise, you can trust them with their advice and grow your company better.
Taxation
The outsourced bookkeepers come with thorough knowledge of the taxation rules. They will prepare timely and accurate financial records that help you with a smooth and profitable tax filing process.
What Should You Consider While Outsourcing Bookkeeping Services
You can outsource bookkeeping services for your business if you find an authentic firm that offers bookkeeping services in Texas, USA. Here is what you need to check for before collaborating with such firms.
Experience
- Check for the firm’s expertise in handling bookkeeping services for companies similar to yours. Ask for a proven track record of the same.
- Check for the years of expertise and the certifications that the bookkeepers in the firm have.
- Find out the industries they have catered their bookkeeping services to. For Texas, understand their knowledge of taxation and other rules for businesses.
Technology
- Discuss the tools and platforms the firm uses for bookkeeping services.
- See if they have tools or platforms that help you with real-time updates and collaborations.
- Check for the feasibility of integrating their systems into yours for smoother data transfers.
Confidentiality
- Get a fair understanding of the non-disclosure terms the company has while working with the clients.
- Ask them about the processes they follow and the data protection measures they take to safeguard client’s data.
- Check their policies that safeguard your financial and operational information.
Services
- Check with the bookkeeping firm about how their services align with your business goals.
- Find out if they offer solutions and services that are customized and tailored to meet your business goals and suit your business needs.
- Speak of the scope and their ability to scale up or scale down the services according to the growth of your business.
Communication
- Check for the mode of communication the firm wishes to have with your team.
- Check for the timings they work for you and the number of catchups they would have with you.
- Check for their proficiency of your language if you are outsourcing bookkeepers outside Texas.
Support
- Along with the services the bookkeeping service firm provides, check for the support they offer your company.
- Check if there will be just one bookkeeper or a team that will work for you.
- Understand the company hierarchy and the point of contact they have for better communication purposes.
Cost
- Outsourcing a bookkeeping service reduces your cost, but find out the cost of the services the firm quotes.
- See if the budget aligns with your financial plans and works well for your goals.
- Also check if the bookkeeping firm can tailor their services according to your business needs.
Knowledge about the law:
- Understand how compliant the bookkeeping processes of the bookkeeper are with respect to the taxes and other rules.
- Check if they can advise you on the financial aspects that can save your taxes.
Scope of collaboration:
- Look for a long-term collaboration with the bookkeeping services company you are planning to onboard.
- Understand how they can align their services to your business goals and work with you to help your company grow.
Bookkeeping is a service that needs the right bookkeeper who does not just make entries, but also advice you rightly in balancing and improving the financials of your business. At Entelyglobal Solutions, we have certified bookkeepers who have catered to companies across various industries. Contact us today to discuss the scope of collaboration we can have.