Book-keeping Benefits

 

Book-keeping is an activity concerned with the recording of financial data relating to business operations in a significant and orderly manner. It covers procedural aspects of accounting work and embraces record keeping function. Obviously, book-keeping procedures are governed by the end product, the financial statements. The  term ‘financial statements’ means Profit and Loss Account, Balance Sheet and cash flow statements including  Schedules and Notes forming part of Accounts.

The essential idea behind maintaining book-keeping records is to show correct position regarding each head of income and expenditure. A business may purchase goods on credit as well as in cash. When the goods are bought on credit, a record must be kept of the person to whom money is owed. The proprietor of the business may like to know, from time to time, what amount is due on credit purchase and to whom. If proper record is not maintained, it is not possible to get details of the transactions in regard to the income and expenses. At the end of the accounting period, the proprietor wants to know how much profit has been earned or loss has been incurred during the course of the period. For this lot of information is needed which can be gathered from a proper record of the transactions. Therefore, in book-keeping, the proper maintenance of books of account is indispensable for any business.

Objectives of Bookkeeping:

1. Complete Recording of Transactions – It is concerned with  complete and permanent record of all transactions in a systematic and logical manner to show its financial effect on the business.

2. Ascertainment of financial Effect on the Business – It is concerned with the combined effect of all the transactions made during the accounting period upon the financial position of the business as a whole.

3. Book-keeping serves as a permanent record of the monetary transactions of an enterprise

4. Business and it can be produced as an evidence, whenever and wherever required.

5. To know the profit or loss of the business during the financial year.

6. To know the total assets and liabilities of the enterprise.

7. To know what the businessman owes to others and what others owe to him.

8. Businessman comes to know the current year’s progress over previous year and compares its financial results with other business enterprise in similar line.

The importance of Book-keeping:

Benefits of Book-keeping

   Focus on Growth: They handle your non-revenue generating and repetitive tasks so you can focus on important stuff.

Financial Savings: The real value of outsourcing bookkeeping is that it reduces overall operating costs.

Bookkeeping Mistakes: Bookkeeping service provider have multiple cross-check process that helps to spot mistakes in accounts before they become costly.

Expert Advice: You can quickly get advice from experts about your business decisions like where to get a loan from, what will be the cost of the product, how to save on taxes etc.

Cash Flow Management: Bookkeeping services can solve businesses cash flow problems by providing advice like to make the use of the separate account for business transactions, have a credit card for business and stop cash transaction.

Financial Report: It helps you to generate financial reports on a regular basis. It will help you to keep track of your business earnings and spending accurately.

Technology: Every service provider has the latest technology and experience of working with the latest accounting software. You will get experts without any investment.

Reduce the Risk Factor: It reduces the risk of money stolen by trusted employees. So it minimizes the risk of internal fraud and can improve trust and compliance.