Bookkeepers will use accounting software such as QuickBooks to record the daily transactions of a business, such as purchases, sales, payments, and both accounts receivable and payable. They will also keep track of financial transactions for individuals. Bank and credit card statement reconciliation are also offered. Everything is entered into the software which organizes it into accounts and journals.
Even though bookkeepers probably do not have a four-year degree in accounting, they are overseen by those who do. One can therefore trust that work is done accurately and in line with accounting principles and local and state laws. This becomes extremely important when filing taxes and other time-sensitive documents.
Another chore that those with employees have to deal with is payroll processing. The higher the number of employees the harder this can become, as the proper taxes need to be withheld, along with wage garnishments, retirement contributions, health care premiums, etc. These companies can do all this and more.
Payroll services will calculate the proper taxes and then determine the amount each employee is paid. They will also print checks for the business to distribute to employees or perform direct deposits into bank accounts if needed. They will also issue W-2's at the end of the year and keep track of W-4 forms throughout the year. This frees up the business owner's time or could also keep them from having to hire an employee strictly for this purpose.
Payroll companies and bookkeepers also can create reports for managers and owners. These can show how the money is used, how much employees make, and how much revenue is generates. Their meticulous records also ensure that calculating and filing taxes goes smoothly, due mostly to the fact that everything is already organized. No longer will the owner or manager have to sift through a shoebox full of receipts to file taxes or wonder where the money is spent.
Processing paychecks and recording receivables and expenses can use up to 40% of a business owner's time. Using this type of service just makes good business sense. These services can, in many cases, be familiar with the software the company uses, which makes integration easier between the service, owners, and managers. Some services specialize in particular industries, such as agriculture or car dealers and have the appropriate software for each.
Bookkeeping and payroll services can also help train employees in the use of their accounting software. They can organize existing files and are less expensive than hiring a CPA. A bookkeeper will work with the company's choice of CPA to create financials and tax returns. This type of service is a boon to owners and individuals alike.
