Benjamin Franklin once quoted: “Beware of little expenses; a small leak will sink a great ship." Such a quote is true for businesses. Keeping track of the financial ins and outs is vital to success.
Bookkeeping has existed since 6000 BC. Artifacts are showing that the ancient Greek civilization used commercial contracts and numerical records. They are evidence that of a financial record system of farm products. However, the modern-day bookkeeping system was introduced in the 15th century. The Italian Mathematician, Frater Luca Pacioli, detailed the double-entry system using journals and ledgers.
So, if you’re looking for someone to help you with accounting, you may have thought of bookkeeper outsourcing services. Let’s look into what services you can get from hiring one.
What does it Mean to Outsource Bookkeeping Services?
Bookkeeper outsourcing services means contracting an outside vendor to handle or your books within an agreed period. If your in-house team cannot attend to these financial matters, the vendor can provide both accounting and bookkeeping services.
It’s important to note that accounting and bookkeeping are two different functions. An accountant is responsible for analyzing and interpreting a company's financial standing. They give recommendations to help company owners and managers in their decision making.
While a bookkeeper collects, manages, and records financial data that will serve as the basis for an accountant's recommendation. Bookkeeping doesn't involve the analysis of financial data. But, it’s important for them to accurately record all transactions.
What are Bookkeeper Outsourcing Services?
Bookkeeper outsourcing services perform varied functions depending on the contract of agreement. Here some of the basic and straightforward services and tasks.
Recording of Income and Expenses.
Bookkeeper outsourcing services record transactions in a rigorous way. They will log debits and credits on a digital ledger together with supporting notes about these incoming or outgoing transactions.
For example, when a sale was made, they will update the ledger with a new cash input following strict code instructions imposed by a company. In case an item or service is paid, they will update the ledger with a new expenses record. What's important in this posting processes is for them to show three balances:
- What has come in?
- What has been spent?
- What is the current financial balance of the business?
Processing Invoices and Payments.
Bookkeeper outsourcing services also work on invoicing and payments. First, they manage the processing of payment for any products and services bought by a customer. Then, they will create and issue a receipt for any sales transaction.
Each invoice is recorded to the ledger as an income of the company. On the other side, they are also responsible for checking all the items bought by the company. They’re the ones who follow up with the payments made and organize proofs of payments. Each payment is recorded as a company expense.
Conducting Daily Banking Activities.
Bookkeeper outsourcing services also involve reconciling the company's bank accounts. They need to view all bank transactions to log them into the ledger. Like the recording process, they should mark what comes in and goes out to alert the business if they need more funds in the account. This is to avoid bank overdrawn or exceeding the overdraft limit.
Bookkeeper outsourcing service is responsible for managing and updating financial reports that can help the business makes better financial decisions. It will be a great help for any business to outsource bookkeeping tasks as it saves both time and resources