How Do Outsourced Bookkeeping Services Help Small Business?

Are you looking for the best online accounting and bookkeeping services for your small business? These are two essential aspects of running a successful company of any size, not just large corporations. Indeed, both are equally important for small businesses to fulfill their financial and legal requirements.

However, too many small businesses fail to keep their financial records up to date and accurate.

If that’s you, an online bookkeeping service can play a vital role in managing your organization’s financial records and keeping your books updated at all times.

Keep reading to understand how outsourced bookkeeping services can help small businesses like yours keep their records straight and grow their organization.

What Do the Bookkeepers Do? (A Brief Guide)

Bookkeepers take the pulse of a business. From completing data entry, collecting transactions, tracking debits, and maintaining and providing accurate financial information, they do all these tasks on a day-to-day basis. They also generate invoices, complete payroll, and file tax returns.

The reports they create go to business owners and managers to help them make decisions. Several aspects of small business management can benefit from a bookkeeper’s services. Here we discuss seven areas where virtual bookkeepers can help your small business.

1. Make Financial Statements

A bookkeeper stays on top of your business’s accounts by keeping a record of all your transactions and preparing your financial statements. These include a profit & loss statement, a balance sheet, and cash flow statements. These showcase your business’s current financial position and bottom line, its assets and liabilities, operating expenses, and how much money you have going in and out.

Bookkeepers prepare an accurate and up-to-date book for the accountant. This helps the latter use their knowledge to make business recommendations and complete any tax returns.

2. Manage Bank Feeds

Many small businesses take loans. Bookkeepers maintain a record of these liabilities and payables. Even if you don’t take out loans to cover your business operations, your bookkeeper will keep track of all your transactions by managing your bank feeds. They may also use accounting software, mobile apps, or a spreadsheet.

3. Generate Invoices, Manage Accounts Payable (AP) and Accounts Receivables (AR)

Another significant responsibility of bookkeepers is that they prepare invoices and send them to clients so your business can receive payments on time.

Furthermore, bookkeepers keep a record of your accounts payable (money owed by a company to its creditors) by taking note of payment information in the general ledger. Bookkeepers will use information from an invoice to note the products or services a third party provided. For accounts payable, invoices may contain:

• Contact information
• Costs
• Payment terms
• Products or services provided
• Number of the purchase order

A bookkeeping service will pay on behalf of its small business clients. These can include supplier payments, petty cash, and other payments.

In addition, bookkeepers will manage your accounts receivable (the money a customer owes a business for its products or services) and record them in the general ledger. Accounts receivable are reported on a balance sheet as a current asset.

4. Keep Your Business Prepared for Tax Season and Compliant with Tax Laws

Dealing with taxes is difficult, as one mistake can cost your business a lot. Among the countless tasks that comprise managing your small business, staying on top of your books and filing your taxes before the deadline can feel overwhelming.

In that situation, a talented bookkeeper is a real life-saver. They make sure your small business is always prepared for tax season by submitting all relevant documents on time. Furthermore, they make sure that you are compliant with all the relevant tax laws.

5. Payroll Processing

Payroll processing is a bookkeeping responsibility that ensures that workers are getting paid what they deserve. There are specific s

teps that bookkeepers follow during these calculations to pay employees and document any necessary changes. They include:

• Examining employee records and making necessary changes.
• Determining hours worked during the pay period.
• Calculating wages, direct deposit, and paychecks.
• Determining deductions.
• Calculating net pay.
• Reporting payroll.

 

6. Cash Flow Preparation

Small businesses should always keep an eye on the total amount of money going out or coming into their accounts. This information will help them decide whether they can utilize that net amount to bring in more inventory.

That’s where bookkeepers come in. They keep a record of what products produce these amounts so the owners know which ones are generating more revenues. They also ensure that the business does not run out of day-to-day money. They also keep a check on the balance of revenues to expenses, along with offering advice on if the business needs more available cash in order to operate.

7. Dealing with Foreign Currency Transactions

Although small businesses don’t make as many sales internationally as larger ones, there are times when they may make sales to international clients. In those situations, online bookkeepers can deal with foreign currency transactions and record these payables and receivables to calculate profits and losses.

 

These are some of the major responsibilities that you can avoid by hiring an online bookkeeper for your business. They will help with the critical tasks of accounting and bookkeeping so that you can run your business smoothly. If you want a professional and experienced outsourced bookkeeping service, contact Virtuous Bookkeeping. We keep your books flawlessly accurate.