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Common Misconceptions about Bookkeeping

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When we talk about financial services, what we commonly hear are a set of notions and misconceptions that surround such services. There are only a few people who understand how these services work. Amongst all of the financial services, bookkeeping is very demanding by a lot of businesses across various industries.

Bookkeepers handle a very crucial task for each business they work for. Their work is of paramount significance for business growth and sustenance.

But quite surprisingly, there are a set of misconceptions and myths about bookkeeping services, in general. This has led to a general aversion or rise of doubts amongst entrepreneurs when hiring a bookkeeper or outsourcing this segment.

This article highlights and explains the most common misconceptions about bookkeeping, which surely need to be brushed down.

  • Bookkeeping is another name for data entry

Bookkeeping is way more than just data entry. Yes, data entry is one component of bookkeeping while the job comprises a lot of other roles including timely financial analysis, and planning for a business. The main objective of bookkeeping in the modern financial world is to create a foundation of financial information, which will lead to business intelligence and a competitive edge as you make timely decisions based on factually accurate information.

  •  Bookkeeping needs good maths

You do not need to be a math whiz to learn bookkeeping, however, some numerical literacy is required for it to be done properly. Bookkeeping efficiency does not solely rely on number proficiency. Tasks like establishing and maintaining strong client relationships or finding ways to optimize tax savings are all about creativity and personal integrity, not figures.

  •  Bookkeeping is a job of an accounting degree holder

Most bookkeepers do not possess an accounting degree. There are many paths to this profession you do not need to be a math whiz, a finance degree is not mandatory, you do not even have to be a graduate. This might put off some from this profession, but this is a piece of good news that you can do bookkeeping without any strict preliminary requirements. A combination of good bookkeeping courses and hands-on expertise in bookkeeping software can pave a promising path for you in the bookkeeping profession.

  •  Bookkeepers can fix all Financial Issues

Some business owners try to manage the bookkeeping on their own and near to tax season consult professional bookkeepers to review the accuracy of work done throughout the year. The misconception that bookkeepers can fix anything whenever they are taken on board can result in serious financial implications for the business. Expenses need to be entered accurately as they incur, with proper understanding to avoid any costly errors in the future. Unless the business owner is himself an expert in bookkeeping, a professional should handle the account balance from day one. Almost everywhere the accountants do the same accounting and bookkeeping simultaneously.

  •  Small businesses do not need bookkeeping

One of the monumental misconceptions in the business world that impacts the bookkeeping profession is that a small business is too limited to reap the benefits of bookkeeping and only bigger businesses need one. Practicing bookkeeping with a professional is often a smarter choice and size does not matter. Businesses at any stage of development in any industry need bookkeeping. It is extremely essential not for accounting but for longer-term growth of the business and making critical business decisions based on the books maintained.  

  •  Bookkeeping is only needed at tax time

Bookkeeping today is not merely limited to facilitating the preparation of tax returns and ensuring compliance with CRA, it has transitioned to generating business intelligence for use in creating a competitive edge. For this purpose, a business owner can no longer wait until the end of the year to complete the bookkeeping. The business owner requires information each month to generate financial reporting so that he can keep a score of how the business is doing financially.

Bookkeeping and accounting, these both are mostly handled by an accounting firm.

To steer clear of misconceptions like these and work with accounting professionals in Toronto, Mississauga, Hamilton, Oakville reach out to Filing Taxes. Aside from our professional bookkeeping services, we also offer personal taxes, corporate taxes, business planning, and payroll services anywhere in Canada. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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