Business owners should explore for a better option when the in house bookkeeping fail to handle the financial complexity of the business.
It should be noticed that, when your current business process need to be more functional and strategic. A good budget plan along with proper internal audit can help it to a great extent.
In the current scenario, small business accounting outsourcing is in a boom. That is due to all the good reasons like the industry is changing and our economy is forcing the companies to improve their process to contribute more to the continued growth of the nation by increasing its productivity and profitability.
Business in recent days, are spending more on recording their financial transactions. So let’s first discuss what is the significance of accounting to the modern businesses? Whether the painstaking efforts really worthy?
Outsourced Bookkeeping is essential to record business transactions. These transactions are to be summarized, analyzed and put in a structured manner to prepare the financial reports. These financial statements are extremely important to know the financial health of the organization. The outside parties interested in the business financial reports are the stakeholders, creditors, investors, debtors, and the government as well.
To satisfy the financial needs of the aforesaid parties the business has to publish its annual profit statement. The yearly financial statement includes income statement to identify the real profit earned during the financial period, secondly the balance sheet to ascertain the financial health of the organization as on a particular day, and lastly the cash flow statement to locate the sources of incoming and outgoing cash to the business.
Thus accounting and bookkeeping services play an important role in business in preparing compiled financial statements. This practice of systematic maintenance of records is highly necessary to compile the financial statements for the need of the parties like:
- Lenders and Creditors: They are the banks and companies who give money to the business with a consideration of a fixed amount of interest. Before lending money they assured the creditworthiness of the business depending on the financial statements. Generally, Lenders and creditors are interested in the taxes paid, reserves and assets of the business. So it is very important for the business houses to maintain a proper accounting system. A wrong bookkeeping procedure may result in wrong financial reports which will under-cast or overcast the profit figure.
- Information to the Investors: The investors including customers and employees have a share in the profit of the organization that is the reason they are interested to ascertain the income earned by the business. Apart from that, potential investors want to know the company’s performance before investing in its shares.
- The management: The management of the organization needs the financial statement and summarized reports to plan new business policies and strategies for the future course of action. Decision on capital expenditure and save money for expansion, are also planned based on it. The financial statements are also useful for making estimation and planning Budget.
- The government and authority: The government or the state authority implements the tax on the business organizations based on their income generated. No business can skip the statutory taxes and income tax.
An inflated profit leads the business to pay more taxes which will be a loss for the organization while a lower profit may reduce the creditworthiness and market reputation of the business unit. So the profit should be fair and actual.
Law stipulates compulsory auditing of accounts to keep the interest of these parties directly and indirectly associated to the business profit. We the outsourced Bookkeeping extent our bookkeeping services to the big and small business units, individual enterprises, companies, and CPAs operating in the US.
We can handle recording your routine financial transaction including bank reconciliation, bills payable and receivables, making invoices, reporting activities and presenting annual accounts statements in a hassle-free manner.
The business owners now can get peace of mind and can run the business in a more organized way. Accounting though significant, but not the core activity of the business. Entrepreneurs should concentrate on the key business activities and building a better customer relationship. This is the secret of the success of any business in today’s date.