No matter the industry, bookkeeping is a task that every income-generating business needs to manage. Without support from a skilled bookkeeper, a company wouldn’t be able to keep track of day-to-day finances or make vital budgeting decisions. To better illustrate the value of this role, here is a brief look at what bookkeeping can do for your business and why it’s important.

What Is Bookkeeping?

Bookkeeping is the oversight and organization of a business’s daily financial activities. The main goal of this practice is to record all transactions related to the company, whether the business is making payments or receiving income. These figures are checked for accuracy to ensure all numbers can be used for other accounting and financial planning purposes.

What Tasks Are Involved With Bookkeeping?

Bookkeepers will review daily receipts and record them—usually with the help of specialized accounting software, such as QuickBooks™. To monitor cash flow, these receipts are designated either as income or expenses. Physical receipts are typically scanned and filed so they can be easily accessed if needed.

Depending on the needs of the business, the accounts will be balanced daily or weekly. Balancing is the process of subtracting accountants payable (expenses) from accounts receivable (income) to provide a snapshot of any earnings.

Many bookkeepers also provide payroll services to ensure employees and contractors are paid accurately and on time. Payroll also involves coordinating tax payments and processing benefits.

Why Is It Important?

Without daily bookkeeping, you wouldn’t be able to know how much money your company has gained or lost within a given time frame. Monitoring these figures is crucial because they can alert you to financial issues that need to be resolved—such as unpaid client invoices, missing cash, or pending customer credits. 

If you use a certified public accountant for tax preparation services, they will likely use your company’s bookkeeping records to report quarterly and annual income. Receipts will also be used to calculate deductible expenses, while payroll records are used to assess employee tax liabilities.

With the use of bookkeeping software, daily reports can be used to create both detailed and big picture analyses of company finances. These reports make it easy to communicate growth with investors, as well as make projections to inform important company decisions—such as whether to expand operations, hire more staff, or cut back on inventory.

Providing comprehensive accounting services in Saint Peters, MO, William G. Molitor, CPA is a trusted bookkeeping resource for businesses in the St. Louis Metro area. Serving clients for more than 30 years, this office is adept at recording and assessing cash flow, as well as processing payroll and formulating reports. These certified public accountants can also assist with more in-depth fiscal management responsibilities—including financial planning and tax preparation. To see how this skilled team can refine your business operations, visit the firm online, or call (636) 926-0502.