What Level of Accounting Service Does Your Business Need?
When you're running your business, it's important to keep track of vital financial information. Not only are they needed to determine whether your business is profitable or not, but there are also a wide range of legal requirements your financial records will need to meet. At Accountrely, we regularly receive inquiries from businesses about what level of accounting help they need. Here's a quick overview of common levels of accounting services and why they're important.
Bookkeeping is the process of creating the records of your company's everyday transactions. A bookkeeper will record your company's incoming and outgoing funds, post debits and credits to the appropriate accounts and produce invoices and checks for your business. They also maintain and balance your business' accounting ledgers, including the general ledger, subsidiaries and any historical accounts your business may have. Completing payroll is another common task undertaken by most bookkeepers.
When your business needs an accountant, it's because you need a higher level of knowledge and expertise to keep your business going in the right direction. Accountants take the information provided in your bookkeeping documents and analyze it for a number of different purposes. They then create reports to help the business owner understand where their finances stand and what impact their decisions may have on the company. Typically, they'll prepare financial statements, adjusting entries, analyze operating expenses, provide guidance for financial decisions and prepare the business' taxes.
But how are these services different than tax preparation overall? Where the other two levels of service have a long history using the same general techniques and knowledge, tax preparation can change on a yearly basis. New tax credits may come into play while depreciation rates change. Because tax topics and figures change on an annual basis, a tax preparer must keep their knowledge up to date with every tax law change.
When you take the time to have your business' financial records prepared properly, the records can provide you with insights into your business' overall financial health while meeting your legal need for accurate records. If you need help determining what level of services you need or need to turn your business' finances over to an outside agency, Accountrely is here to help. Please feel free to contact us today for more information.