Unveiling Accounting Secrets Your Part-Time Bookkeeper May Not Know

Are you a small business owner who relies on a part-time bookkeeper to keep your finances in order? If so, you may not be getting the full picture when it comes to your business’s financial health.

While your part-time bookkeeper may be doing a good job of tracking your income and expenses, they may not be aware of some of the more complex aspects of accounting that can make a big difference to your bottom line.

Professional bookkeepers, on the other hand, are always on the lookout for ways to improve your financial reporting and save you money. Here are just a few of the things your part-time bookkeeper may not know that a professional would.

Important Accounting Practices Only Professionals Know

1. You Need to Use the Accrual Method of Accounting When Following the Generally Accepted Accounting Principles

If you want to stay in compliance with the Generally Accepted Accounting Principles (GAAP), then you need to use the accrual method of accounting, rather than the cash-based method. The accrual method of accounting recognizes revenue when it is earned, regardless of when the money is actually received. This is in contrast to the cash-based method, which only recognizes revenue when the money is actually received.

2. Timely and Accurate Financial Data are Key Elements in Boosting Profitability

By keeping track of your company’s financial information, you can make sound decisions that will save your company money. Inaccurate financial data can lead to costly mistakes. For example, if you make a mistake when calculating your inventory, you may end up overstocking your products and tying up valuable capital in excess inventory.

If you underestimate your expenses, you may be short on cash when you need it most. With that in mind, timely and accurate financial data can help you avoid these costly mistakes. By keeping track of your company’s finances, you can make informed decisions that will save your company money.

On that note, a professional can help you set up a system for tracking your company’s financial information and can provide guidance on how to use this information to improve your bottom line.

3. Handling Payroll Taxes Cross State Lines can be More Complex

There are a number of different payroll taxes that businesses are responsible for paying, and if you have employees in multiple states, the tax burden can become quite complex. Each state has its own rules and regulations regarding payroll taxes, and failing to comply can result in hefty penalties.

If you’re paying employees in multiple states, it’s important to stay up-to-date on the latest changes in each state’s tax laws. In addition to staying compliant with state and federal tax laws, you also need to make sure you’re withholding the correct amount of taxes from your employees’ paychecks. Withholding too little can result in penalties and interest, while withholding too much can cause financial hardship for your employees.

The best way to ensure you’re withholding the correct amount of taxes is to use a payroll service. Payroll services can help you calculate the correct amount of taxes to withhold, and they can also handle the filing and payment of your payroll taxes. This can take a load off your shoulders and help you avoid costly mistakes.

The Bottom Line: It’s Better to Invest in a Dedicated, Professional Bookkeeping Services to Solidify Your Financial Health

Bookkeeping is a complex and time-consuming task that requires knowledge of accounting principles and procedures. Without this knowledge, it’s easy to make mistakes that can have costly consequences for your business. By working with a professional bookkeeper, you can ensure your finances are being managed most efficiently and effectively as possible. C

At Ash CPA, we provide comprehensive CPA and bookkeeping services to help businesses keep track of their finances and ensure compliance with regulatory requirements. Contact us today to schedule a consultation! We would be happy to discuss your needs and help you find the best solution for your financial situation.