Orlando small business bookkeeping is vital for the long-term success of your business. Here’s what you need to know.
Bookkeeping gives you an accurate look into your company’s financial health, and having this accurate picture allows you to make better decisions and plan for the future. It can be time-consuming to do this on your own, especially if you are unsure of how to do it. That’s where hiring an Orlando small business bookkeeping service comes in.
Outsourcing your bookkeeping needs is a great way to keep your business on track for financial success. Here are some ways they will help:
Set-Up & Maintain Chart of Accounts
The first step is to set up your chart of accounts properly. Your chart of accounts isn’t limited to your bank account, it’s a record of all financial transactions impacting your business.
There are five types of accounts:
- Assets: cash or resources the company owns
- Liabilities: debts owed by the company
- Revenues: money earned
- Expenses: money spent (vendor bills, payroll, etc.)
- Equity: value remaining after liabilities are subtracted from assets
Hiring an Orlando small business bookkeeping service will ensure that your accounts are set up and being recorded correctly.
Record Financial Transactions
Once a bookkeeper has set up your accounts correctly, they can then begin to record what’s happening with your money. One reason this can be a time-consuming process is that most bookkeeping is done using the double-entry accounting system. What this means is that every transaction recorded requires an equal and opposite entry in another account.
An example of how this might be recorded:
You just paid $1200 for a new espresso machine for your restaurant. You would decrease your cash (an asset account) by $1200 and increase your equipment account (also an asset account) by $1200.
It can be very time-consuming to try and figure out proper accounts and bookkeeping processes on your own. Having a professional on-hand to do this will save you a lot of time and headache because it’s imperative to have a thorough record in order to balance and close your books.
Monthly Reconciliation of Balance Sheet Accounts
At the end of each month, your bookkeeper will reconcile your balance sheet accounts, such as bank accounts, credit card accounts and loan accounts to your statements. This ensures that all transactions that flow through your company have been accounted for and nothing has been missed or duplicated. This month-end process allows your Orlando bookkeeping service to be able to provide accurate financial statements on a monthly basis and helps simplify your tax preparation at year-end.
Prepare Financial Statements
Preparing your financial reports is a crucial task of your bookkeeper. Your statements will summarize the flow of money in each account and give you insight into the financial health of your company.
There are three main reports your bookkeeper will create for you:
- Balance sheet: summarizes your company’s assets, liabilities, and equity.
- Income statement: summarizes your revenues, costs, and expenses. This helps you compare your sales to your expenses.
- Cash flow: shows where your business is earning and spending money without items such as depreciation.
From these reports, you’re able to get a better insight into your financials and make forecasts for your future. By hiring a professional to help with the preparation of these statements, they can give you insight into areas where you might be overspending. Not only that but they can also give you tips on how to minimize spending and grow your income.
If you’re looking for an Orlando small business bookkeeping service, look no further. Contact us today to get your business headed down the right financial path.