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Bookkeepers and accountants’ work often overlaps, as bookkeeping is a part of the accounting process. A bookkeeper records and classifies a company’s daily financial transactions such as sales, payroll, payment of bills, etc.
The cost of hiring a bookkeeper can vary depending on the size of the business and the Bookkeeper’s experience. However, on average, a bookkeeper will charge anywhere between $40 – $85 per hour, depending on the size of the business.
Bookkeeping involves the recording, regularly, of a company’s financial transactions. With proper bookkeeping, companies can track all their books to make critical operating, investing, and financing decisions.
Our bookkeepers manage all financial data for all companies.
Bookkeeping is the recording of financial transactions and is part of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other business events.
Transactions include purchases, sales, receipts, and payments by a person or an organization/corporation. There are several standard bookkeeping methods, including the single-entry and double-entry bookkeeping systems. While these may be viewed as “real” bookkeeping, any process for recording financial transactions is a bookkeeping process.
The person in an organization employed to perform bookkeeping functions is usually called the bookkeeper (or book-keeper).
After that, an accountant can create financial reports from the information recorded by the bookkeeper.
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Methods of Bookkeeping Services
Before you begin bookkeeping, your business must decide what method you will follow. When choosing, consider the volume of daily transactions your business has and the amount of revenue you earn. A complex bookkeeping method designed for enterprises may cause unnecessary complications if you are a small business. Conversely, less robust methods of bookkeeping will not suffice for large corporations.
Importance of Bookkeeping Services
Proper accounting services and bookkeeping and payroll services give companies a reliable performance measure.
It also provides general strategic decisions and a benchmark for its revenue and income goals. In short, once a business is up and running, spending extra time and money on maintaining proper records is critical.
El Cid can give you consulting services on your bookkeeping. We work with many small businesses. We can provide you with monthly financial statements and your income tax return for IRS and State.
Many small companies don’t hire full-time accountants to work for them because of the cost. Instead, small companies generally employ a bookkeeper or outsource the job to a professional firm.
Bank Account Balancing
Bank account balancing is the process of finding identical transactions in your bank account and your bookkeeping records.
Balancing your bank accounts is a crucial step in bookkeeping.
Because, after everything else is logged, it is the last step to finding discrepancies in your books. Bank account balancing helps you ensure nothing amiss with your money.
Why is it Mandatory for Bank Account Balancing?
Bank balancing is a must because it:
- Provides the exact financial situation of your company
- Tracks cash flow accurately
- It helps detect fraud or bank errors
There are two basic types of bookkeeping: single-entry and double entry
There is a fundamental division between single-entry and double-entry bookkeeping systems. Each transaction is recorded with one entry in a journal or log-in single-entry procedures. Single-entry systems are sometimes adequate for small, uncomplicated businesses, but they have several limitations and pros and cons.
In double-entry systems, each financial event is recorded using two corresponding entries called a debit and a credit.
You debit one account for each transaction (or another financial event) and credit another account.
Each debit always equals the corresponding credit.
You choose which accounts to credit/debit according to the accounting equation.
Which states that Equity = Assets – Liabilities, but don’t worry about the details of how this works for now.
Enter your debits/credits correctly; the sum of debits for all accounts will always equal the corresponding sum of credits.
Keep reading our blog to find more details about the bookkeeping concept you want to learn next.
The Accrual vs. Cash Basis of Accounting
To properly implement bookkeeping, companies need to choose which accounting basis they will follow. Companies can choose between two basic accounting methods: cash or the accrual basis of accounting.
The difference between these accounting bookkeeping services is based on the company’s actual records of a sale. These can include (money inflow) or purchase (money outflow) in the books.
The next, and probably the most important, step-in bookkeeping is to generate financial statements by an accounting tax person. These statements are prepared by putting all your information from the entries you have recorded on a day-to-day basis.
Reports provide insight into your company’s performance over time. They reveal the areas you need to improve on to be a comprehensive business.
The major financial reports that every business must know and understand are the balance sheet and income statement.
The balance sheet reports a business’s assets, liabilities, and shareholder’s equity at a given point in time. In simple words, it tells you what your company owns, owes, and the amount invested by shareholders.
However, the balance sheet is only a snapshot of a business’s financial position for a particular date.
It must be compared with balance sheets of other periods as well.
The balance sheet allows you to understand your business’s liquidity and financial structure.
Through analytics like current ratio, asset turnover ratio, inventory turnover ratio, and debt to equity ratio.
The debt-to-equity ratio is financial too. This indicates the relative proportion of shareholders’ equity and debt used to finance a company’s assets.
Closely related to leveraging, the ratio is also known as risk, gearing, or leverage.
The income statement also called the profit and loss statement. This statement focuses on the revenue gained and expenses incurred by a business over time.
There are two parts to a typical income statement.
The upper half lists operating income, while the lower half lists expenditures.
The statement tracks these over a period, such as the last quarter of the fiscal year. It shows how the net revenue of your business is converted into net earnings, which result in either profit or loss.
The income statement does not focus on receipts or cash details.
El Cid Bookkeeping, Inc.
We love empowering small business owners around their monthly financial reports.
Our bookkeeping services offer full-service bookkeeping and all types of income tax preparation for all businesses, individuals. We have bookkeeping set-up and training.
El Cid Bookkeeping Inc. and Taxation Services have serviced over 4500+ businesses.
Many include small businesses, Corporations, S corporations, other business companies. And sole proprietors throughout the San Fernando Valley, Los Angeles, San Diego, Inland Empire, Orange County, and Sacramento areas. Our services including, online bookkeeping services, virtual bookkeeping services, and we are a dedicated bookkeeper to your account.
- Income entries
- Expense entries
- Invoicing or billing
- Accounts payable
- Accounts receivable
- Bank Statements
- Credit card accounts
- Payroll Taxes
- Send monthly Profit and Loss and Balance Sheet