It is worth highlighting that bookkeepers are primarily responsible for recording all transactions concerning the business in the appropriate accounts. They are responsible for recording all business-related transactions in balance as well. However, their core responsibility does not involve identifying, analysing and / or presenting a holistic picture of these recordings for displaying the results of financial activities for a specific period.
Many bookkeepers provide their services with paper and pencil. Alternatively, many online bookkeeping firms enter the transactions directly into various software applications. Regardless of the manner in which bookkeepers records these transactions, the likelihood of errors is something that you cannot rule out. As such, bookkeepers could enter the wrong data. Or, they could post certain transactions to the incorrect account. Naturally, in this scenario, no business would be able to make sound financial judgements based on this incorrect information. This only serves to highlight the importance of bookkeeping in the business world.
To minimise the chances of errors, many businesses hire qualified third parties for conducting audits of their financials each year. These auditors review and analyse all bookkeeping entries. In addition, they review all accounting reports generated from these bookkeeping entries. This enables them to confirm the accuracy of the financial reports and statements prepared by the business accountants. Many businesses take important decisions based on their financial health. As such, if these reports happen to be incorrect, the owner could end up making poor decisions, which could be harmful for the business. This highlights the value of wholesale bookkeeping services these days. Bookkeeping stores all the details of the company’s transactions and provides sound indicators of future results. As such, it helps business owners to understand the financial health of their businesses. Moreover, it helps them identify which actions worked in favour of their business and which did not.
Lastly, many business establishments refer to their books for determining the amount of taxes they need to pay. The information computed by the bookkeepers is useful for preparing tax returns as well. In some cases, the tax agencies might require additional information. Or, they might wish to ascertain whether the company has paid the right amount of taxes. In this scenario, the business owner would need to present accurate records to the tax agency for review. In case the tax agency finds anomalies or discrepancies in the company’s books, it could impose hefty fines or penalties. In severe cases, the
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