What are the basics steps in Outsourced Bookkeeping?
Bookkeeping is a cyclic process, primarily because it follows a timeline and certain steps in a circular workflow. There are several layers to bookkeeping and the process goes through various stages. While performing these simple bookkeeping tasks, business owners must take utmost care and complete them vigilantly and ingeniously.
If you want to add value to your bookkeeping, which you should, you must always be on your toes and follow the basics very keenly; it is a tough and intricate job, and also one of the most pivotal aspects behind the success of any start-up. These steps are significant to follow and critical to analyze at the end of a term. Follow this space to understand the basic steps in an accounting cycle and improve the quality of your books.
Keeping track of transactions
As soon as you begin, you start by investing in an inventory, for which you get invoice from the supplier. If your customer pays you by credit card or any other means, you get a bank statement or receipt for it as well, and when you pay your employees, you keep the records in a salary roster. These are important resources for your business and the proper documentation of these slips and receipts is very important for effectively recording the financial records of your business.
Your first objective for quality bookkeeping is to keep track of various business transactions and proper documentation to support it. Always make records of every small and big transaction of your business and keep proper documentation to support it. With few awesome accounting software and tools that facilitate simple data entry tasks and help evidently with financial reporting, you can do a lot more while saving both time and money.
Financial Reporting is done for a specific accounting period. Any stretch of time that you select as per your needs – be it a day, week, month, or a year – is an accounting period. While year is the longest time period for financial recording, most business heads and outsourced bookkeeping services prefer reporting of financial statements at least once in a quarter. If you have outsourced your bookkeeping, ask the firm to report key issues in your financial accounts once in a month. Analyze these reports and use them while taking qualitative management decisions.
Adjust Trail Balance
As a business owner, you are supposed to manage several financial accounts to manage various expenses and transactions. At the end of an accounting period, all these accounts have to be summarized into a final inventory account that is listed as the external balance sheet of the business. This process is required for tax returns and reporting of financial statements. This is also the stage where your bookkeeper identifies lapses in your financial accounts in correspondence to the trial balance.
Closing of financial year
Bookkeeping is one tough part of any business that is done for a specific period of time. But this is an ongoing task and doesn’t end with the end of a term. However with the end of a term, a business owner can close the books for the previous year and file the taxes and other returns to start afresh for the next year. Always crosscheck for lapses at this stage.
To be an entrepreneur is easy, but to do it successfully is tough; you have to be innovative and visionary to keep a check at the competition. These simple steps not only allow you to manage your funds in a better way, but also help you to be successful at your business and visionary at managerial decision making.