Is Accounting and Bookkeeping the Same?

 What comes to mind when you think of bookkeeping? Maybe it’s all just numbers and spreadsheets? But is that really all there is to bookkeeping? Answer: no. Bookkeeping, of course, involves the art of tracking all financial transactions of a business in detail. Many seek professional QuickBooks bookkeeping services for this task, so they can have an accurate view of how their business is performing. So, what does bookkeeping actually do, and what are its benefits?

What is Bookkeeping?

Bookkeeping is how you track and record your business’s financial transactions. These business activities are recorded based on the company’s accounting principles and supporting documentation, including receipts, bills, purchase orders, and invoices.

You can record these transactions in a journal by hand or use an Excel spreadsheet for easy recording. Again, QuickBooks bookkeeping services come in handy in such situations. You can use any bookkeeping software for the task.

Bookkeeping is just one part of your business record keeping. If you can manage bookkeeping well, your business can efficiently track its financial capabilities and move toward heightened profits, identify growth opportunities, and move closer to success.

Bookkeeping vs Accounting

Many think these are the same. Did you? While bookkeeping and accounting may seem interchangeable, it is easy to confuse the two. Consider accounting the umbrella under which is bookkeeping. Accounting covers all processes associated with recording a business’ financial transactions.

Bookkeeping includes recording financial transactions, processing payroll, preparing financial statements, and posting debits and credits to a journal.

Accounting includes performing audits, preparing adjusting entries, filing relevant tax returns, and reviewing and evaluating financial statements.

So, while accounting is the umbrella term, accountants wouldn’t be efficient in providing business owners with the insight they need to understand their business processes to make informed financial decisions.

2 Types of Bookkeeping for Small Businesses

There are two main types of bookkeeping: single-entry and double-entry bookkeeping.

Single-Entry Bookkeeping: If you run a small startup or are a sole proprietor, you may choose this to track cash sales and expenditures over time. With it, you must maintain:

● Cash Sales Journal: You record all business revenue.

● Cash Disbursements Journal: This is where the business records all expenses.

● Bank Statements: All journal entries must align with the bank statements.

Double-Entry Bookkeeping: Double-entry bookkeeping refers to recording transactions in at least two accounts, like credit and debit. When choosing this method, the debit amounts recorded must match the recorded credit amounts. This bookkeeping method is perfect for companies with accrued expenses. For this, you need these documents:

● Payroll

● Loans

● Inventory

● Cashbooks

● Journal entries

● General ledgers

● Accounts receivable

● Accounts payable

This system is common in QuickBooks bookkeeping services and other accounting software. With it, bookkeepers record transactions under income or expense. They can prepare a second entry to classify the transaction on the right account.

Streamlining Finances with QuickBooks Bookkeeping Services

 Effective bookkeeping is essential for the smooth operation of any business, ensuring that finances are well-organized and easily accessible. QuickBooks bookkeeping services provide a reliable and efficient solution for business owners to manage their finances without the hassle of manual record-keeping. Whether you're a small business or an established company, QuickBooks can help streamline accounting tasks, allowing you to focus on what matters most—growing your business.

What Is QuickBooks?

QuickBooks is a popular accounting software designed to help businesses manage their finances. It simplifies various aspects of bookkeeping, such as invoicing, expense tracking, payroll management, and financial reporting. The platform is user-friendly, making it accessible even for those with little accounting experience. QuickBooks also integrates with multiple third-party apps, providing a flexible solution that adapts to the needs of your business.

Key Features of QuickBooks Bookkeeping

QuickBooks offers a range of tools designed to make bookkeeping more manageable:

- Automated Invoicing and Payments: QuickBooks enables businesses to send invoices to clients and accept payments electronically. This feature helps streamline cash flow, ensuring that you get paid faster and track unpaid invoices effortlessly.

- Expense Tracking: The platform automatically tracks and categorizes expenses by linking to your business bank accounts and credit cards. This makes it easier to monitor spending and manage deductions come tax time.

- Payroll Services: QuickBooks handles payroll processing, tax filing, and employee payments, ensuring that payroll is always accurate and on time.

- Financial Reporting: QuickBooks generates detailed financial reports, such as profit and loss statements and balance sheets, allowing business owners to gain insights into their financial performance. These reports are essential for strategic planning and ensuring business growth.

Why QuickBooks Is Ideal for Small Businesses

For small business owners, managing finances manually can be time-consuming and prone to errors. QuickBooks automates much of the bookkeeping process, reducing human error and saving valuable time. It also offers cloud-based access, meaning you can update and view your financial records anytime, anywhere. The cost-effective pricing plans make it accessible to businesses of all sizes.

Conclusion

QuickBooks bookkeeping services offer a powerful solution for businesses seeking to streamline their financial processes. With features like automated invoicing, expense tracking, payroll services, and comprehensive financial reporting, QuickBooks simplifies the complexities of accounting, allowing businesses to operate more efficiently.

6 Reasons Why You Should Outsource Your Business’s Accounting

 There are a couple of sound arguments in favor of hiring in-house accountants. Most of these opinions prioritize the business’s need to keep all aspects of its operations under the same roof.

However, outsourcing the task to third-party providers of accounting services in Santa Monica is a more modern approach. These accountants will not work on-site. Rather, they will focus entirely on tasks assigned from a remote location.

Here, you will read a few compelling reasons why so many businesses consider outsourcing their accounting needs.

1. It Frees Up Time

Managing an in-house employee or a team of workers requires you to invest more time than outsourcing. In-person interactions alone can take up an hour or two every day. That is minus the added time needed for hiring, training, evaluating, and actual managing. You can assign some tasks to others, but it will consume their time. Understandably, outsourcing is the better option.

2. Full-Time Employees are Expensive

Just add all the expenses mentioned above – hiring, training, evaluating, and managing. When you do, you will realize that having an in-house employee is much more expensive than an outsourced accounting service in Santa Monica. You do not have to provide a third-party accountant with healthcare, retirement savings accounts, or sick days.

3. Professional Expertise on Demand

In-house accountants can take of accounts payable and accounts receivable. They may even prepare your taxes. However, there is something they cannot do. They will be unable to provide on-demand professional expertise that only a full-service accounting team can give you. Such a team has more resources at its disposal than an individual. Third-party accountants also keep tabs on current accounting rules and trends.

4. Better Efficiency in Other Areas

By taking accounting responsibilities out of your hands, third-party accountants make you more efficient in other areas. If you own a business, you get more time to focus on other aspects of your company. Outsourced accountants can take care of your payroll and budgeting apart from offering expense management and performing other accounting tasks that you or the management team do not have time for.

5. Liability Assumed by the Firm

The matter of liability is one of the most convincing arguments for outsourcing accounting services. Delegating the task of preparing financial statements and taxes to an in-house employee puts the liability of mistakes entirely on your shoulders. Nothing will buffer you from the Internal Revenue Service (IRS) or Securities Exchange Commission (SEC).

6. Better Software Solutions

In-house accountants never get enough time to shop for better accounting software. Accounting firms require the latest and best technology to stay one step ahead of their competitors. This means updating existing software and evaluating new fintech solutions created especially for accountants regularly.

One Last Tip

Finally, an in-house accountant is a paid employee who needs to work a certain number of hours. This employee could be on a full-time or part-time schedule. The constant with either is that you have to pay them even when there is nothing for them to do. An outsourced accounting service in Santa Monica does not work like that. You will pay them only when you need their services.