Many people know they need bookkeeping but not all know what exactly bookkeeping is. At the most basic, bookkeeping is categorizing and classifying financial transactions to derive pertinent information for tax filing, financial reporting and budgeting.
This may seem like an easy process but the nuance is in the details. Knowing what and how to properly record a transaction can be tricky and often requires detailed knowledge of accounting and IRS rules. Make a mistake and you could be costing your business money in missed deductions, IRS penalties, or misinformed decisions based on bad information.
Vector Bookkeeping prepares cash based tax ready books for our clients. We ensure that you have the most up-to-date and accurate information for your business. We bring peace of mind to our clients by preparing their books for tax filings, budgeting and financial reports.
Modernize Your Business
Built By Accountants
Everyone at Vector Bookkeeping LLC is dedicated to providing our clients with the up-to-date professional financials and documentation needed to successfully run their businesses and file their taxes.
Our sister firm Sohler Law sees it all the time… April 15th approaches and new clients reach out for taxes in a panic to file on time. Often these new clients have ignored their books for long periods of time, or even worse they have had a bad experience with someone they hired to do their books for them. In many of these cases the work must be turned down because the resources to clean up the mess are not available. Many tax firms do the same and those that do take the work charge a premium for the additional mess and workload. Vector Bookkeeping believes in maintaining your books throughout the year on regular intervals so when tax season approaches you are prepared and ready to file your taxes.
Tough Decisions, Easy Solutions
Outsource or Do It Yourself?
There is a myriad of options available for you to handle your books, but they all fall into the same basic two categories: Do It Yourself, or outsource your bookkeeping to a professional who can handle all your accounting needs.
The D.I.Y. option may be suitable for a sole trader, but for a business with any kind of volume in revenue, it can become a burden on the principals. All the manual work entailed in keeping your books up to date can be too much, so why not outsource the work to a professional?
For Individuals And Businesses
It doesn't matter whether you are a large corporation, a small business or an individual running your own company, a good accounting system is a must if you want to understand how your business is performing and be able to communicate that information to others such as owners, investors, banks and even the IRS. Being able to keep your books in balance is the key to running a successful, profitable business.
When was the last time you looked at your income statement? How about your balance sheet? Do you know where your money is going and where it is coming from? Financial reports are a powerful tool to know exactly what the levers of your business do and how they affect your business. How do you reduce your operating expenses? Who is your most profitable client, project or line of business? How old are the balances on your outstanding client bills?
These are all questions that can be answered with proper bookkeeping and financial reports. We get it, budgeting can be boring and tedious but knowing how much your current employees truly cost you so you can plan for a new hire to expand your business is critical in making the right decisions for your business. Accurate and timely bookkeeping is an absolute must to build these budgets and put your resources to the most profitable and best use. Without it, at best you are making an educated guess, at worse, you may be rolling the dice that things will just work out. With proper bookkeeping you will have the piece of mind that your decisions are informed, strategic and the right move for your business.
1. A quantity having direction as well as magnitude, especially as determining the position of one point in space relative to another.
Outsource or Do It Yourself?
When it comes to hiring a professional bookkeeping company, there are always two questions at the forefront of your mind: How does it work, and what is the cost?
One way it can work is to hire a local bookkeeper who will either come to your business and work on your books or possibly take your paperwork away to their premises. They will charge an hourly rate that will mount up over time, but this is not a sensible time-saving solution.
The best way is to outsource your bookkeeping tasks to a company that can do all the work online. Sometimes referred to as "Virtual Bookkeepers" you will get the best of both scenarios. A knowledgeable bookkeeper will be assigned to your company to do your accounts and by accessing the latest accounting software, they will monitor your finances, all done online, for a prearranged set monthly fee.
How Does It Work?
Unlike today's Virtual Reality devices, your Virtual Bookkeeper does exist. He or she is part of a large team of highly qualified bookkeepers who are available for online chat or a phone call. You are connected to your assigned bookkeeper by means of a secure, online connection with access to your own account.
Your transactions will be downloaded automatically via online banking and, if appropriate, from your merchant account processor so there is never any need to send them paper receipts.
Working with a service where all the transactions are stored securely online, and access to your financial information can be achieved from anywhere at any time.
Secure Access to your finances from anywhere
Some companies handle small business bookkeeping online by means of industry-standard accounting software, while others use dedicated software and apps to link to your accounts. Whichever method is used, security is a prime concern, especially in today's world of technology where the slightest breach in security can lead to disaster. All major outsourcing small business bookkeeping companies use data protected 256-bit SSL/TLS encryption. This is the same level of encryption used by online banks and online stores.
Whether the accounting services company you hire uses proprietary or industry-standard software to access and prepare your books, they should be granted view-only access to the financial information. At no time should they have the ability to move funds or sign checks on your behalf. Your bank will liaise with you to arrange this.
What To Expect From A Bookkeeping Company
The hiring of an accounting services company or bookkeeper for your business may be one of the best investments in your company. The services offered by these companies depend on the size of the company, the industry you are in, and any particular areas where help is needed. Instead of one-solution fits all approach, the company you hire should have a dedicated employee who will handle your business and be available by phone or email to answer any questions you may have. If your dedicated team member is not available for some reason, then another member of the team should be able to step in and fill the gap.
Here are a few of the services that may be implemented for your company.
Create a chart of accounts: This is structured to show the different accounts needed for the business to operate. As all transactions flow through the bank account, classifications will be done to highlight spending and income trends. This can be a bit time-consuming trying to maintain the accounts on a daily basis, which is where your bookkeeper comes in to help with the mundane tasks.
Reorganize the books: If your books consist of paper receipts and notes about transactions, then it becomes difficult to sort through it all and produce reports. A financial professional will step in, restructure your current record-keeping, and get you back on track.
Reconciling Accounts: Even if you have been conscientious about recording transactions either manually or by using a PC, mistakes can still be made. Reconciling the main accounts on a regular basis is vital to ensure accuracy. Reconciling the bank account transactions to those shown on the bank statement or online will identify possible discrepancies and give you a chance to rectify any mistakes.
Prepare a trial balance: A trial balance will be prepared and any adjustments for accruals and prepayments will be done, ending with an adjusted trial balance, which is the basis for final accounts, Balance Sheet, and Profit & Loss Statement.
Financial Reporting: One of the many benefits of using financial services is that you have instant access to reports showing the financial health of your business. This aspect is of particular benefit when tax season is looming. All the information from your business dealings is collated into various reports to make finalizing your tax returns as stress-free as possible.
Easy Access to Information: You should be provided with all the necessary software to view your financial reports, update critical information, or just “chat” with your bookkeeper.
Let us take care of You
Overall, outsourcing your accounting tasks to a bookkeeping company should free up your time so you can concentrate on growing your business. Yes, this type of service does involve costs, but those are probably less than employing a full-time bookkeeper, and you get the benefit of having part-time services with full-time presence.
With accurate accounting in place, you can have peace of mind that any decisions you make will be informed, considered and right for your business.