The corporate world realizes the importance of bookkeeping services for avoiding the complications in maintaining the financial records of a company. Apart from this, the bookkeeping services also assist in producing the true financial position to the income tax department, and take advantages all tax relief, on various grounds.
The accounting department of any organization plays a crucial role in the success of every business. Every entrepreneur wants to keep a record of all the financial transactions,
including the sales-purchase or the income-expenditure done during the current financial year. Some times, the small and big corporate houses, hire the professionals from outside, to carry out different tasks associated with accounting.
Bookkeeping is an integral part of accounting, and there are many bookkeeping services, which help the organization by taking care of maintaining the record of every single penny that comes in or goes out of the organization's funds. Therefore, the organization head is constantly in touch with the accurate situation of his business. Since, a lot of transactions takes place during the entire day for carrying out the business operations, it becomes time consuming and complicated for the business owner to take note of all those transactions. However, the presence of an efficient bookkeeper provides much relief to the organization head, because he knows that there is someone to take care of each and every penny. It is important to understand what does bookkeeping actually means.
Meaning of Bookkeeping:
Bookkeeping is a part of accounting which is related to recording and maintaining the financial record. Each organization has to keep a record of it's financial transactions, which comprises of the detailed information about sales, purchase, employee payments, bills, earnings from various resources and the expenditure of every kind.
Importance of Bookkeeping Services:
Every one of us feels the need to know that where did we spent the earned amount, at the end of the month. This helps in understanding our shortcomings and strong points and planning the things accordingly, to save a little for each month. Similarly, The entrepreneurs running small or large businesses also feel the need to know about any over expenditure done in the past and the sources that provide maximum income to the company. For this, they have to keep a record of all transactions done on the part of the company. Since, the organization head wants to keep many things confidential, he wants to hire a reliable person to keep a record of all the transactions, who does not belong to the same company. The role of bookkeeping company is very crucial in such circumstances, when the owner of the company wants that the secrecy about the exact financial position of the company is maintained properly. It is also essential to understand that the bookkeeping services have to be responsible for not misusing the records of any organization, because it will tarnish the image of the related organization, as well as, the bookkeeping service itself.
Responsibilities of Bookkeeping services:
The bookkeeping services are responsible to carry out the following things in a systematic manner:
1. The original bills and receipts are to be organized in a logical manner, so that no vital document goes missing. It is the sole responsibility of the bookkeeping service to be able to produce any document at the time of need.
2. The book of accounts has to maintained with due care. The professional bookkeepers are trained for dealing with bookkeeping activities. Most of the times, the bookkeeping services make use a computer software, which also requires a training.
3. The preparation of the documents related to the different tax liabilities and to provide suggestions for the effective managerial decisions. The organization is dependent on the bookkeeping services for the completion of income tax, trade tax and all the other tax related documents.
Different Methods of Bookkeeping:
There are two different ways of bookkeeping. Single-entry bookkeeping method involves the maintenance of the record on the accounts book in a simple and uncomplicated manner. A record of all the financial transactions related to the amount received and amount spent is maintained in a single-entry bookkeeping method.
The double-entry bookkeeping method is a bit sophisticated as compared to the single-entry method. The double-entry bookkeeping system requires to make changes in the debit and credit accounts after each transactions. This method helps in knowing the errors in calculations, in a simple manner. The credit amount must match with the debit amount, and if there is any mismatch between the two of them, it makes clear that something must have went wrong while maintaining the records.
