What is Bookkeeping?
Bookkeeping is gathering, classifying, recording, reconciling, analyzing and reporting the financial transactions of your business.
Bookkeeping is the process of gathering all the transactions in one place, then classifying them into the different areas of the business, recording them into accounting software including electronically attaching documentation to each transaction, reconciling your accounts to be sure bank balances and your books match, analyzing the data to spot trends and key performance indicators, and then reporting all of this information to you, the business owner.
Why is Bookkeeping Important?
Your financial statements are the backbone of your business. Good clean bookkeeping practices and well managed books greatly enhance the lifeblood of your business.
- Proper bookkeeping allows a clear understanding of your business’s financial strengths and weaknesses.
- Proper bookkeeping enhances your ability to obtain a business loan.
- Proper bookkeeping enables your CPA or tax advisor to provide sound tax advice instead of generating and correcting financial statements.
- Proper bookkeeping keeps your business on the right track financially so you can closely monitor your key performance indicators.