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Teal, Becker & Chiaramonte offering valuable insights, impressions and commentary on today's financial and business world.

Bookkeeping: The Backbone of Financial Management

What does bookkeeping mean?  It can be defined as the recording and tracking of a businesses’ financial transactions on a regular basis.  Bookkeeping involves the tracking of each business transaction and the purpose of each transaction.  Examples include invoicing a customer for work performed (revenue), recording an accounts payable due to a vendor for services incurred (expense) and paying wages to employees (expense).  This information can be captured within a manual accounting journal or an online accounting program, such as QuickBooks Online.  Online accounting programs offer many benefits to a company, such as cloud-based access to selected users, back-up and storage functions, security features and the ability to use technology automation for routine accounting tasks to streamline reporting (i.e. categorizing recurring account transactions).

Bookkeeping can be done daily, weekly, monthly, quarterly or on an annual basis from a company office or remotely.  Best practices recommend bookkeeping to be done on a recurring basis at least monthly but should be done more often.  When bookkeeping is completed for specific time-period and accounts are reconciled and reviewed, financial reports can be generated from the accounting system such as a balance sheet, income statement and a statement of cash flows.  These reports can provide business owners and company management with real-time accurate financial information on a timely basis that can be used to help make informed business decisions.  For example, tax planning with a CPA during the year, cash flow position analysis, tracking budget to actual results, fixed asset purchase considerations, etc.

Bookkeeping can be performed by in-house accountants or an outside professional firm.  There are many benefits of using an external professional firm like TBC to outsource the bookkeeping needs of your company.  These may include:

  • Saving company time to focus efforts on other important business needs
  • Saving company costs of recruitment, hiring and training in-house accountants
  • Providing access to a team of experts to handle your industry-specific needs
  • Offering company flexibility to take on more or less work at different points of the year (i.e. busy or slow seasons)
  • Helping the company get prepared for necessary tax filings (corporate, personal, sales tax, etc.)

Many business owners may push bookkeeping to the bottom of their priority list as it may not be their favorite task or they do not have time to devote to it. It may even keep them up at night knowing they are behind or do not know where to turn for help.

For questions or additional information on services, please consult with your trusted TBC Advisor.