How To Improve At Outsourced Bookkeeping Services Business?

Outsourced Bookkeeping Services Business can be huge and transaction details must be maintained for the company to be able to determine its financial standing. Companies make a lot of purchases, pay a lot of costs, owe money to a number of entities, obtain sales, pay employees, create estimates, order inventory and gather money from its clients. The responsibility of the documentation thus goes to the bookkeeper.

Outsourced Bookkeeping Services involves turning over all the time-consuming bookkeeping tasks to the service provider including paying bills, recording deposits, reconciling bank accounts, among others. They manage the entire bookkeeping task online. The clients simply send over the transaction documents via mail or sync their bank accounts to their service provider accounts. Once received, the bookkeeping process starts.

A normal bookkeeping process starts with the purchase or sale of a product. A document is produced, invoice or receipt, that records the transaction. Deposit slips are produced when the company deposits money to their bank accounts. Checks are used to pay certain accounts. These receipts, invoices, checks, deposit slips; form the transaction records that need to be preserved and here is where the role of a bookkeeper comes into picture.

The official bookkeeping process starts with recording the details of these documents into business accounting software. For example, credit sales are recorded as accounts receivable, cash payments are recorded in the petty cash account. The transactions are recorded using double-entry bookkeeping. Software for bookkeeping are designed in such a way that many non–bookkeepers do not even realise that they are using the double-entry procedure to record transactions.

In the second step, the credit and debit columns are maintained in the ledger and the two columns are totalled. If the total is the same, the sheet is balanced. If the totals do not match, there is an error that must be found before proceeding.

After the columns have been totalled (and corrected) the accountant produces some adjustments and journal entries and changes the balance in some of the accounts. Known as the adjusted trial balance – this feature is still present in many of the present accounting software applications such as QuickBooks Accountant Edition 2011. This information and the final list is then used to make the company’s financial statement.

The final step in the Outsource Bookkeeping Process involves preparing the financial statements which includes the income statement, balance sheet and the statement of cash flows. All the three statements need to be reviewed to have a clear idea of the financial standing of the company, although most small businesses focus on the income statement only.

Thus the bookkeeping process is not a mere maintenance of company’s daily transactions. A lot goes into creating a detailed ledger with the mention of each transaction and the preparation of the final report to determine the company’s position. The bookkeeping records thus keep the company ever ready for an audit check and aware of its capital flow.