Do you have a dedicated bookkeeper? You will be surprised to know that the vast majority of small businesses and medium-sized companies do not employ specialist bookkeepers, but would rather just ask their office managers or administrative assistants and secretaries to do all of the bookkeeping needs of the company.
Although accounting processes may have been simplified by accounting software like Quickbooks, these people are not equipped with the technical know-how to operate and use bookkeeping techniques- let alone use Quickbooks and other similar programs to its maximum potential.
The normal progression of a business is that it would always grow given enough time in the industry, as well as clients who are willing to work with you for the long haul.
Once your company gains a revenue upwards of $2 million, then your accounting needs will also increase and that your non-official bookkeepers might not know what to do anymore.
If you are still adamant in using your own managers and secretaries to do your bookkeeping needs, you may just go out there and hire some outsourced bookkeeping services in Malaysia to help you, especially when something technical needs to be done.
Today, I am going to talk about some accounting secrets that your current ‘bookkeeper’ might not know about (but those who had formal education do).
The GAAP Dictates that You Follow the Accrual Method of Accounting Rather than the Traditional Cash-Basis Method
Bookkeepers who have had full education know the Generally Accepted Accounting Principles or the GAAP. The GAAP dictates that the bookkeeper or accountant must follow accrual accounting methods of recording your company’s income and expenses rather than the old and traditional cash-basis method.
That is because logging your financial transactions using the Accrual method ensures that it is easier to read and it also assures you that it remains accurate, honest, timely, and that the data can be used easily to help influence your business decisions.
Payroll Taxes Can Be Complicated, Especially if Your Non-Bookkeepers Cross State Lines
Supposing that you live in America or in some countries that do not have reciprocity agreements, all of the employers are required to withhold payroll taxes in both the state (or country) that your employees live and the state they work in.
For example, your employee lives in Tennessee but would have to commute to Kentucky to work. That is usually considered a normal occurrence for most employees, especially when it is still their first job.
However, there are also times where some employees live in the same state as your company, but would have to travel to another state in order to take service calls and make sales. This is usually the case for employees in the contracting industry when they are needed to work in a neighboring state other than the state they currently live in.
Bookkeepers know exactly what to do and record in order for this to be reflected accurately in your company’s financial records.
Accurate and Timely Financial Data May Help Companies Increase Profitability and Reduce Costs
It should come as no surprise that accurate and timely financial statements can help company owners increase profitability and reduce their expense costs. Not only that but it can also help them detect any semblance of corporate fraud and other misrepresentations.