How can bookkeeping help your business? For a new entrepreneur, knowing how to manage business finances is vital. Bookkeeping keeps track of all business transactions, records them, and makes sure that the cash flow in the business is proper. So how can bookkeeping help your business?
In today’s competitive business world, professional conduct is essential. The value of professional conduct is vastly recognized. For instance, the UK’s Accounts Code empowers consumers to take their rights against businesses, if they do not meet these rights. Similarly, the ICB and IFA codes of professional conduct are internationally recognized. If your firm has a proper internal control system, proper internal bookkeeping business processes, reliable internal resources, and proper risk management, then only then will you be able to succeed in a highly competitive business environment.
You may be thinking about why a business-to-business firm would need to know more about bookkeeping qualifications. You will find that professional conduct encompasses a wide range of activities, all of which are crucial to a business. A firm needs to maintain direct relationships with its customers. It also needs to understand its competitors. There is no point in starting off your business by outsourcing your bookkeeping needs to an IFA who happens to have a couple of years of bookkeeping experience, is certified under the National Professional Liability Insurance Scheme (NPLIS) as a professional bookkeeper, and is licensed with the Revenue and Customs (HMRC) as a Chartered Accountant.
Accountant or Bookkeepers
Instead, it makes sense for the firm to hand over its bookkeeping business responsibilities to an independent professional accounting firm. These are highly trained individuals who have extensive accounting and bookkeeping experience. This means that they are aware of all the technicalities that the accountant or bookkeepers will have to deal with. You are therefore assured that your bookkeepers are working in tandem with the most technically sound persons in the company. Since most professional bookkeepers charge fees for their professional services, it is only logical that your business owner should pay for their services.
As mentioned earlier, most professional bookkeepers are also highly qualified accountants. Their job requires them to develop financial records that are accurate and up-to-date at all times. In order to do this, they must have a thorough knowledge of all business documents and the relevant tax rules applicable to his or her profession. This knowledge can only be gained through training courses and relevant practical experience.
If you think that an IFA can only work in the confines of a company, think again. Most professional accountants have also spent time in colleges and universities earning a bachelor’s degree as well as a master’s degree. In case you feel that you need to hire a certified bookkeeper who has met the minimum requirements, then you should look for one at a local accounting institute. Certified bookkeepers at these institutes are required to have a minimum of 5 years of relevant experience before they are given permission to take up bookkeeping jobs. The degree that you earn from a traditional school also determines the amount of salary that you will be paid.
The next question that you might ask is how can bookkeepers help my business? The process of recording financial transactions is not easy and bookkeepers do an excellent job in this regard. The reason why some businesses prefer to hire them is that they handle the most complex and difficult task of accounting. When an individual is given the task of keeping track of every single transaction that takes place in the company, he or she must have the technical expertise and the knowledge of how to use accounting software effectively. This software can be very confusing for non-professionals, so it is imperative for accountants to understand the basics of the task before they hire the services of an individual.
If you want to know how can bookkeepers help your business, then it is obvious that you need to understand the significance of accounting and bookkeeping records. There are numerous books available that teach you about the procedures of maintaining accounting records. You should start looking for a qualified professional who has acquired the necessary qualifications to be able to perform the role of an accountant. You should also keep in mind that there are two levels of bookkeepers – the entry-level and the supervisory level. Usually, the entry-level bookkeepers record daily financial transactions such as sales or purchases. They have general supervision over their subordinates, but they have no managerial authority.