“You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself” – Warren Buffet.
Every commercial business venture whether it is buying or selling goods or services is concerned with income and expenses since the balance between these strategic numbers dictates profit or loss for the organisation.
All business transactions need to be recorded to keep track of the business and that is the task of bookkeeping. The objective of the bookkeeping service provider is to maintain financial transactions in a proper and systematic manner.
Accounting is a demanding job, time consuming to ensure accuracy and balancing of books. Accounts departments are notorious for being first in, last out in most organisations.
The line between accounting and bookkeeping has slowly started to fade away. With the emergence of accounting and bookkeeping software, the results generated have become very efficient and accurate making outsourcing of this function an attractive option.
With the rise in technological advancements and introduction of innumerable accounting packages that can be purchased off the shelf, accounting has transformed as a function and become a business service rather than an in-house ever-growing department.
To gain a competitive edge, outsourced bookkeeping and accounts offer more value by adding services such as budgeting and forecasting, inventory management and even asset management. Payroll processing is also within the gamut of the outsourced Accounts company. The options are an end-to-end service or recording the necessary entries to enable in-house payroll process.
For consulting and advising firms, Finance has always been the important option and starting point. They are now able to extend strategic services beginning with bookkeeping and analysis. By outsourcing these services to professionals, companies save time and money. They can utilise their resources to focus on their core competencies.
The advantages of having accounting and bookkeeping services are numerous and well acknowledged.
- Most important is the comprehensive recording of all financial transactions according to norms set by authorities. A good bookkeeping service provider will always abide by the laws and regulations and given the dynamics of the business environment, a bookkeeper needs to be well versed and updated on changes in norms and requirements.
- Detailed and systematic bookkeeping eases other business processes such as planning and budgeting.
- Transparent and clear accounting is imperative to win the confidence of shareholders and investors. Comprehensive financial statements that confirm a strong financial position reveal a company’s true potential and encourage investors as well as bankers to support the company.
- Well maintained records pave the way for faster and reliable auditing. Whether the audit is sourced from the accounting firm or elsewhere, professional bookkeeping reduces the time and effort needed for an audit.
As author of the famous book ‘Rich Dad, Poor Dad’, Robert Kiyosaki said,” the word accounting comes from the word accountability. If you are going to be rich, you need to be accountable for your money.”