Even if you use QuickBooks, you may still need the services that a bookkeeper provides. Here are reasons why having a bookkeeper is a good idea, even if you use QuickBooks.
Does a clogged drain necessitate calling a plumber? Maybe, but maybe not. However, when you’re constructing a new home, you have a plumbing plan as part of the design phase, well before you begin construction. The same principle applies to your business’s accounting needs.
When you establish a new business, a bookkeeper can assist you in determining the most beneficial chart of accounts. You want your financial data to flow smoothly and be accurately accounted for. At tax time, you must be able to identify the activities that qualify as tax deductions. This will allow you to save money and reduce your tax burden. Sometimes, once you have the hang of things, you need a checkup to ensure that you remain on course. These checks can be useful if you experience a “blockage” that prevents the free flow of information. Even if you use QuickBooks, you need a bookkeeper.
A bookkeeper is required to verify your records.
QuickBooks is simple to use. It records the double-entry, or debit and credit, automatically. For instance, when you write a check to pay a utility bill and enter utilities expense, QuickBooks creates an entry that affects both the checking account and the utility expense account. It prohibits the debit from exceeding the credit. However, if you select the incorrect account, QuickBooks will not detect the error. The debit and credit will balance, but the system will not know how to correct the account.
Consider that your company purchases equipment for $5,000. You write a check for equipment expenses and then believe you are finished. Nevertheless, there are regulations to evaluate based on the type of equipment you’ve acquired. You should most likely account for this as an asset on your balance sheet, as opposed to a fully expensed activity in the year it was acquired. Such purchases are referred to as capitalized assets.
The initial entry impacts the balance sheet as opposed to the income statement. Nevertheless, capitalized assets are depreciated and therefore expensed over time. Consequently, additional entries are made over time to gradually depreciate the asset.
There are numerous other instances in which the entry made is not always a straightforward answer and additional information is required to make the correct accounting entry. This is when having access to a bookkeeper is advantageous.
A bookkeeper is required to ensure compliance.
There are numerous areas of compliance to which bookkeepers must pay close attention. Among these areas are tax filings, payroll-related filings, and depreciation and amortization tax rules. QuickBooks assists in performing these functions by providing the necessary information, but it does not detect errors or verify that the filings are complete and accurate. A bookkeeper is required to ensure compliance.
This is exemplified perfectly when a bookkeeper completes the annual tax return. Once a bookkeeper verifies the accuracy of the records, they use the financial data to complete an annual tax return. If income and expenses are not accurately reported, the tax return will reflect inaccurate results. Inaccurate results mean potential fines and penalties. Not only is it essential to file taxes accurately, but also in a timely manner.
A bookkeeper would be able to ensure that you comply with all filing requirements.
In relation to the preceding record entry for capitalizing assets, different rules apply to the depreciation of various assets. Your bookkeeper will ensure that the net value of your assets is accurately reflected in your books by adhering to the most recent tax regulations.
You require the services of a bookkeeper to provide guidance.
Bookkeepers are trained in what to look for and what questions to ask in order to assist business owners not only with day-to-day tasks, such as ensuring your balance sheet is up-to-date, but also with identifying trends and recognizing patterns that indicate something has changed. Bookkeepers are also well-versed in the questions that will aid them in guiding the organization and assisting management. Your bookkeepers can advise you on how to segment information in QuickBooks to determine the profitability of each business segment. You can quickly determine which business segments are not worth additional investment, allowing you to place your attention on the segments that are performing well. Or, your bookkeeper can assist you in determining where to invest money, time, and additional training to bring underperforming business segments back on track.
Bookkeepers are essential to the success of your business.
They will assist you in maintaining accurate records and in adhering to regulations, and they will provide guidance to help you run your business more efficiently. You can’t know and see everything as a business owner, so your bookkeeper is your extra set of eyes. Bookkeepers have the expertise to improve your company’s financial operations.
Everything flows together, but you need a bookkeeper to ensure that everything flows smoothly.
Don’t get clogged up. UptoDate Bookkeeping will keep you organized so that you can focus on what you do best. Contact us to learn more about our Bookkeeping services.