What Entrepreneurs Must Know About Accounting, Bookkeeping Services

So are you planning to start managing your business however scared about financial accounting? Accounting and bookkeeping are some of the most challenging aspects of managing a business. Maintaining accurate recordings of financial transactions can be stressful, especially for those who have no background in accounting. We prepared this article to help entrepreneurs have a piece of background knowledge of accounting and bookkeeping services. Keep reading and learn something new!

What are bookkeeping services?

Bookkeepers are the ones who are in charge of all functions in terms of handling accounting and bookkeeping activities. Their primary objective is to assist individuals by handling, storing, recording all financial transactions in business management. To make it more convenient in gathering financial transactions, most bookkeepers use automated bookkeeping software to avoid human errors. Excel is the most common tool in data recording. Additionally, professionals use cloud-based bookkeeping systems such as QuickBooks.

How does bookkeeping differ from accounting?

Most people are confused about the two because of the similarities of their field. Well, bookkeeping and accounting often focus more on transactional and administrative functions. Bookkeeping involves documenting financial transactions; while accounting involves providing analysis based on provided financial data.

Bookkeeping is a subset of accounting that entails certain tasks to be done to build a financially-stable business. These include recording financial transactions, posting debits and credits, producing invoices, maintaining and balancing current accounts, historical accounts, and general ledgers, and completing payroll.

Amongst the main components of bookkeeping is managing a general ledger. A general ledger is a primary document where bookkeepers keep all their records, expenses, and receipts. 

Interested to learn more about general ledger? Read here.

Photo by Oleg Magni from Pexels

Accounting is about gaining a better understanding of profitability and a keen awareness of your business’ cash flow. It is mainly made up of recording expenses, analyzing the costs of operations, preparing company-wide financial statements, completing income tax returns. Essentially, it is helping the business owner understand the impact of financial decisions by bringing key financial indicators together. Thus, accountants can help entrepreneurs with strategic tax planning, financial forecasting, tax filing, and reviewing business plan.

How do bookkeeping services work?

There are two main types of bookkeeping systems frequently used in recording business transactions: a single-entry and double-entry bookkeeping system. Single entry is suitable for organizations with specific transactions. Comprehensive transactions that include accounts payable and receivable data mostly fit for the use of a double-entry bookkeeping system.

The bookkeepers assist businesses with their finances through

1. Regular management of accounts.

2. Handling updated financial records.

3. Keeping on track to law compliance.

4. Preparing financial statements.

5. Assisting in the preparation of taxes.

6. Providing accurate financial statements.

7. Monitoring business’ cash flow.

8. Maintaining accounts and loans payable.

9. Documenting receipts and invoices.

10. Managing accounts receivable.

11. Reconciling bank feeds.

12. Processing proper payroll expenses.

13. Summarizing equity funds.

Your professional accounting, bookkeeping services provider in Mississauga

Sourcing for competent professionals to handle your business’ accounting and bookkeeping? Look no further than Yousri Ahmed, a Canadian CPA, chartered professional accountant in Ontario. His passion and profession have helped business owners in different sectors in the past 15 years. Reach out now for premium bookkeeping services in Mississauga. Call YACA at 647-991-8381 or email us at yousri@yaca.ca.