What Are Bookkeeping Services?

Let’s have a look at what a bookkeeping service is and how it’s different from just hiring someone to enter transactions into a computer. We’ll explain what exactly a bookkeeping service does and how it benefits your business. We’ll also go over what to look for when hiring a bookkeeping service.

What Are Bookkeeping Services?

If you’re a business owner, you know all too well that you have to keep up with the never-ending task of bookkeeping. You may be doing the bookkeeping yourself, or you may have hired a bookkeeper to wade through the stack of receipts each month.

Either way, the best-case scenario is that the work is done just in time to hand things over to your accountant for tax filing. The less-than-best-case scenario is that the work gets put off. This creates a lot of stress because you’re behind on your taxes and are unsure of how the business is performing.

Neither scenario is very beneficial to you as a business owner.

Solving this common problem is one of the main goals that we have at Filing Taxes. Bookkeeping shouldn’t be that difficult or time-consuming. You should get useful financial reports regularly so you can make educated business decisions. This is our aim with bookkeeping services.

Bookkeeping shouldn’t be that difficult or time-consuming.

What Does a Bookkeeping Service Do?

A bookkeeping service can do much more than just document transactions and hand over the numbers to your accountant. With a bookkeeping service, you’ll have a team of professionals working towards the success of your business.

A bookkeeping services team looks like this:

• Onboarding Manager – This CPA will be in charge of gathering information and setting up your bookkeeping system.
• Bookkeeper – Your experienced bookkeeper will handle the ongoing bookkeeping and finance tasks.
• CPA Manager – Your CPA Manager will be preparing and analyzing monthly reports. You’ll get useful financial information on time.

What can a bookkeeping services team do?

1. Create Efficient Systems

Bookkeeping services start with systems set up. We want to start bookkeeping off on the right foot. The first task is to streamline processes and implement helpful software applications.

Bookkeeping systems should reduce the burden on the business owner and allow easy access to financial information.

An example of a bookkeeping system:

• Point-of-sale terminal 
• Electronic receipt capture application 
• Cloud-based bookkeeping software 
• Payroll system

The bookkeeping works like this:

• Sales are processed through accounting software.
• Receipts are digitally captured with ReceiptBank.
• Transactions are automatically imported into accounting software.
• Business performance is then analyzed and presented in monthly financial reports.

Payroll gets simplified:

• Payroll is quickly processed twice per month. 
• Employees are paid by direct deposit.
• Payroll deductions are automatically remitted to the Receiver General. No more penalties on late payroll remittances.

This is just one example of a system. Your bookkeeping service will create a custom bookkeeping system that fits the needs of your business.

2. Ongoing Management of Finances

With a bookkeeping system in place, your bookkeeping services team can then manage the weekly or monthly finances of the business. This gives you the time and freedom to run your business and focus on the tasks that you do best.

The bookkeeping services team can look after the weekly or monthly financial functions of your business. Services can include:

• Bookkeeping – Record financial transactions so that revenue and expenses are accurately categorized.
• Accounts Receivable – Look after customer deposits and follow up with overdue accounts so that cash flow doesn’t become a problem.
• Accounts Payable – Submit bills for approval and make payments as required. This helps keep good supplier relations by avoiding late payments.
• Sales Taxes – Prepare and file sales tax returns on time so you don’t pay late filing penalties.
• Employee Reimbursements – Prepare employee expense reports for approval and payment. Occasionally, employees make purchases on behalf of the company and will need to be reimbursed. This system ensures that all reimbursements are approved and paid regularly.
• Payroll Setup – Set up new employees in the payroll system. All of the necessary information is collected and entered accurately into the payroll system.
• Payroll Filings – Prepare and file payroll-related forms (WorkSafe, T4s, ROEs). These necessary administrative duties can be difficult if you don’t know what you’re doing. Having a professional look after them will eliminate errors and the penalties that can accrue due to errors.
• Treasury Services – Pay loan and credit card balances on time. Avoid paying unnecessary interest on late credit card and loan payments.

With these financial functions looked after by your bookkeeping services team, you’ll have time to work on the growth of your business.

All of these financial transactions will be tracked within your accounting system. That information is then used to prepare accurate monthly financial reports.

3. Financial Reports and Analysis

Now for the fun part: let’s look at how the business is doing and provide insight on where things can improve.

The CPA Manager will review the bookkeeper’s work and prepare the monthly financial statements. The CPA Manager has experience analyzing the financials of many different businesses. This perspective allows her to provide insightful commentary on the reports.

Financial reports are customized for each business. The information should be easy to understand and useful to the business owner.

Some examples of insightful reports:

• Income Statement (monthly) – This will help you identify how your business is performing over the months, pinpointing trends and opportunities.
• Balance Sheet (monthly) – This report shows your financial position and helps you meet your financial obligations.
• Accounts Payable (weekly) – In other words, who do you owe money to? Do you have sufficient funds to make those payments?
• Accounts Receivable (weekly) – Likewise, who owes you money? Do you need to chase someone for payment?
• Cash Flow (monthly) – Where is your cash coming from? Where is it going? Are there any gaps coming up that you need to fill with external funding?
• Bank Balance (daily) – What is your current cash situation? Checking in on your bank balance helps you keep your finger on the pulse of your business.
• Lines of Business (monthly) – Your monthly income statement can be broken down by revenue stream or line of business. This allows you to see which sections of your business are the most profitable and which may need some changes.

Keep your finger on the pulse of your business with custom reports analyzed by an experienced CPA. With regular financial reporting, you’ll see problems coming before they arrive. You’ll also always know the financial state of your business, so you can take advantage of opportunities when they come your way.

What to Look for When Hiring a Bookkeeping Service?

There is a wide range when it comes to the quality of a bookkeeping service.

We’ve seen bookkeepers who understand how to enter data into a system but know nothing about bookkeeping or accounting. This can be disastrous as problems don’t show themselves until a huge mess has been made. You then have to pay someone else to clean up the mess.

On the other hand, you can find bookkeeping services provided by accounting professionals with years of experience.

To make sure you’re getting the good kind and not the disastrous kind, here are our tips on what to look for when hiring a bookkeeping service.

• Credentials – Anyone can call themselves a bookkeeper. It’s important to ask about bookkeeping or accounting credentials.
• Bookkeeping Experience – It is important to ask about your bookkeeper’s previous experience. Have they worked with a business in your industry and of your size before?
• Experience with Software – Does your bookkeeper have experience using your bookkeeping software? It’s easy for a bookkeeper to make a mess if he is just learning to use the system.
• Reviews – Check for positive reviews on Google, Facebook, or Yelp. These can sometimes be misleading, but a large number of positive reviews is a good sign.
• References – You don’t just have to take their word for it. Ask for a reference from a current client of a similar size to your business. If they’re doing good work for their current clients, they’ll be happy to reach out for a reference.
• Schedule – When can you expect your bookkeeping to be completed each month? What is the response time when you have a question for your bookkeeper? These are important to clarify up-front so you’re not left in the dark for long periods.
• Reports – You’ll also want to know what reports you’ll be receiving and how frequently. Receiving customized financial reports regularly can help you grow your business and improve your bottom line.
• Cost – You will want to know the cost of the services up-front. Whether billing hourly or a fixed monthly fee, your bookkeeper should be able to give you a good idea of what their services will cost each month.

Find yourself a bookkeeping service that can pass each of the tests noted above, and you’ve likely found a competent ally for your business.

Our Services

Our mission at Filing Taxes is to help businesses thrive. One of the ways we do that is by providing top-quality bookkeeping and accounting services.

If the information in this article has resonated with you and you are looking for an ally for your business, check out our services. If you want to chat or have any questions, 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.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.