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There’s a common query about what’s the difference between Bookkeeping and Accounting. Are you confused between the two as well? If yes, continue reading this insightful and informative blog to understand the two different terms in detail.

Need professional assistance to understand the QuickBooks mechanism for Bookkeeping and accounting? If yes, connect with us anytime anywhere and reach out to our QuickBooks team.

The thin line between accounting and Bookkeeping is slowly declining. Agree? With the advent of accounting and bookkeeping application programs, like QuickBooks, some accounting elements are being slowly immersed into the bookkeeping process. Simultaneously, the bookkeeping application can now induce financial statements, which were earlier part of the accounting process. However, there are still many differences between the two processes. So, let’s continue learning the two specifically.

QuickBooks Bookkeeping: A Quick Introduction

Basically, Bookkeeping can be defined as a series of daily operations of your business, including business financial tracking, recording, organizing, etc. A well-maintained bookkeeping practice helps business managers record their business financial data based on the date, figure, and business category. Eventually, they can easily track each and every purchase of their inventory along with accurate sales, payments, and receipts.

To understand Bookkeeping better, you need to pay attention to the following points:

Whatever data has been provided by your business bookkeeping, management can’t make decisions based on that data.
The process of Bookkeeping helps business managers keep all their financial transaction records symmetrically and properly.
An accountant generally oversees the workflow and management of bookkeepers. Also, bookkeepers must be accurate in their financial records.
Bookkeeping doesn’t allow the preparation of financial statements. However, Bookkeeping also doesn’t require any skill sets.
Bookkeeping managers don’t need to do any deep analysis for operating their business financial operations.
You can find two sorts of business bookkeeping: single-entry and double-entry.

QuickBooks Accounting: A Brief Description!

Business managers record, classify, analyze, and present their company’s financial transactions, and this process is called Accounting. This accounting process basically converts a business’s regular financial information into a managed database that helps accounting managers understand their company’s incoming and outgoing cash flow.

If your business is running with a well-managed and proper accounting, you can easily track your company’s financial health based on the outputs of your investors, regulatory authorities, and creditors. These outputs are reported periodically, including your balance sheet, cash flow statement, tax reports, and profit and loss statements. The major role of certified accountants is to manage more complex financial operations.

Take a look at the following points to learn accounting with greater insights:

Accountants provide financial data, which is important to make decisions by your company’s management.
Accountants estimate the company’s financial situation and later communicate the financial information to the relevant authorities.
Since accounting is an analytical and complex process, it requires a special set of skills in the particular accountants handling your business.
The accountants use the information gathered by the bookkeepers to analyze and translate that financial information into data and then convert it into reports.
During the accounting process, all your business’s financial reports are prepared.
Whatever loan proposals you want to make or prepare your company’s budget, the accounting process helps managers to do so.
If accountants wish to be entitled to Certified Public Accountants, they must have enough experience and the required education for the same.

Understanding the Concepts of the Difference Between Bookkeeping And Accounting

Bookkeeping	Accounting
The main focus of the accounting is to file tax returns, conduct task planning and provide tax advisory.	Accounting is the process that uses the information collected by the bookkeeper and uses it for preparing the adjusting entries.
Moreover, using this accounting practice you can easily send customer invoices and record payments received.	It is the practice that is initiated to analyze the actual costs of the operations.
The bookkeeper prepares the monthly financial statements to know the actual financial status.	The accountants examine and analyze financial statements for better performance.
The main focus of this practice is to provide you with the year-end financial statements and tax documents to the accountants.	It helps in processing the payroll so that you can handle payroll-related tasks easily.
Accounting provides its users with essential information to the business owners that helps them in financial decision-making.	It helps in assessing the financial status of your company and helps in preparing the financial forecasts.
Additionally, it helps the users to conduct the bank reconciliation every month. Hence, it helps you in detecting any discrepancies between the accounts so that you can maintain the accounts properly.	Accounting provides its users with the essential information to the business owners that helps them in financial decision-making.
You can also prepare the books for the accountants so that they can easily maintain the cash flow.	The accounting helps the users to perform the audit. Doing so will help the accountants in finding the discrepancies between the financial statements to improve the financial status.

Related Page: Outsource Bookkeeping for Small Business

Particular Functions of Accounting & Bookkeeping

So, we hope you have understood the basic concepts of both accounting and Bookkeeping and the difference between the two. In this section, we will discuss the major roles and functions of both processes for better learning. Continue reading!

Notable Functions of Accounting

The accounting process is mainly and broadly transactional, and that’s why it is considered a subjective process. The following are the principal roles of accounting:

Review your business’s financial statements.
Analyze and accomplish your company’s income tax-related operations.
Accounting plays a prominent role in analyzing your business’s cost of operations.
Help business owners understand their financial operations and make decisions.
Run and customize financial reports as per your balance sheet, yearly reports, and profit and loss statements.

Fundamental Roles of Bookkeeping

Bookkeeping is the key process to running any business successfully, with maintained financial records based on daily transactions. We have listed a few main functions of Bookkeeping.

Bookkeeping helps business managers maintain and complete their payroll-related tasks and operations.
Help business managers post debits and credit information.
With daily Bookkeeping, managers can easily track and balance their company’s subsidiaries, historical accounts, and general ledgers. Maintaining general ledgers is also a main function of the bookkeepers.
Produce and update invoices in real time.
As we noted above, one of the prominent roles of Bookkeeping is to record your financial transactions to help business owners handle their finances.

Accounting & Bookkeeping Workflows in QuickBooks Application

The QuickBooks application is known for handling the bookkeeping and accounting operations and helping business managers seamlessly maintain their financial workflow. Now, both the accounting and bookkeeping processes comprise different workflow features in the QuickBooks application. Let’s have a look:

Accounting Workflows in QuickBooks

Creating and emailing invoices to clients and customers.
Receiving and recording payments for invoices in QuickBooks.
Customizing reports and estimating based on profit and loss statements.
Manage items and inventory with deep analysis of the cost of goods sold and in-stock quantity.
Creating bills and assigning expenses.
Maintaining customer databases with real-time information.

Bookkeeping Workflows in QuickBooks

Automatically track and manage your company’s sales transactions.
Maintain a record of your clients, customers, vendors, and inventory information.
Another bookkeeping workflow is to record and categorize the transaction information into financial account data in QuickBooks.
In QuickBooks, the general ledger records all your business activities.

Summarizing Everything..!

We hope you have learned about accounting and bookkeeping processes with this insightful blog post. However, if any query or confusion is bothering you, you can freely approach our QuickBooks professionals at +1-866-408-0444. Our experts will share their expertise to make you understand everything in detail.

Bookkeeping

Top 10 Common Bookkeeping Mistakes

January 20, 2023 admin

Bookkeeping is the pre-eminent task that small business owners face. Compared to large enterprises, small business owners possess fewer resources. This means that one person ends up wearing more than one hat of responsibilities. Common Bookkeeping Mistakes takes hours and hours of your time. The task might be boring, but it is an essential road for a successful business. An unsuccessful business is paved with unrecorded and poorly managed accounting services and common bookkeeping mistakes. Showing zero interest in fulfilling the basic requirements of accounting affects your business’s health badly.

Top 10 Common Bookkeeping Mistakes & How to Avoid Them

The recurring bookkeeping mistakes will put your business in jeopardy. However, by avoiding the most common top 10 mistakes in bookkeeping, you can save your time and money.

So, below are the top common Mistakes in Bookkeeping that small businesses must avoid for a flourishing and nourishing business.

Carelessness when Bookkeeping
Improper Categorization of Income and Expenses
Not Securing Backups
No Reconciliation
Mishandling Sales Taxes
Poor Internal and External Communication
Fail to Properly Identify Employee
Not Chasing Late Payments
Not tracking Reimbursable expenses
Bad Cash Management

Fortunately, these bookkeeping mistakes can be easily fixed as soon as you notice them. Let us delve a little deeper into these avoidable mistakes of bookkeeping.

Carelessness When Bookkeeping

Poor record keeping or the improper handling of records is the most common mistake that most business owners make. It is quite common to forget about insignificant expenses, receipts, and transactions. However, maintaining an accurate monthly record of finances is mandatory. The monthly record of every income and expense helps you in the audit by not only saving your precious time but also saving your hard-earned money from penalties and fines. It is the job of the bookkeeper to maintain an accurate and up-to-date record. Also, organizing them perfectly is the task of a bookkeeper.

Apart from this, the carelessness shown in bookkeeping will result in the below-mentioned costly bookkeeping mistakes:

It will result in the poor business decision that hampers the growth of your business.
You will end up hiring more employees, taking extra loans, and investing in extra equipment.
The transactions are miscategorized, which results in another bookkeeping problem.
It is harder to categorize the over-mid bookkeeping account.

Improper Categorization of Income and Expenses

The second most common mistake that business owners make is to delegate their financial tasks to someone who does not have the proper knowledge of formal bookkeeping. An incompetent person will mix up your personal and business expenses. Also, they might end up mixing your income and expense transactions. However, mixing up the transactions is the worst endeavor that a business faces. Mixing up of the two accounts creates a problem in reconciliation. Also, you need to verify every transaction other than personal transactions at the time of audit. Henceforth, the merger of two accounts is havoc for the business’s financial structure.

Not Securing Backups

Company data are precious. But what if you have not prepared yourself for the worst, like crashing the system or accidentally deleting a file? Henceforth, it is very important to create a backup of your company data. It prevents the loss of precious data from unforeseen issues. You can create the backup copy to an external hard drive or on the cloud.

No Reconciliation

The worst thing that the business owners do is not reconcile their accounts book with the recent bank statement. The bank reconciliation is a mandatory thing that must be performed every month to ensure the wholesome financial health of your business. The proper reconciliation helps in identifying the right source of your income, which helps in avoiding potential audit issues.

Mishandling Sales Taxes

Neglecting the sales tax comes with hefty consequences and will result in heavy fines and penalties. Also, if your bookkeeping entries are misleading, it will result in calculating the wrong sales tax, which will ultimately land you in trouble in the end. Moreover, as per records, small businesses often fail to deduct sales taxes from total sales, which comes as a surprise tax at the time of filing taxes.

Poor Internal and External Communication

For maintaining a healthy bookkeeping record, it is advisable to have strong and clear communication between the bookkeeper and the company’s employees. The bookkeeper must be aware of the company’s internal process. It helps the bookkeepers in tracking the financial statements. Also, open communication helps them manage the payroll, inventory, and budget in a much better manner.

Fail to Properly Identify Employee

Usually, the small businesses have both the employees and the independent contractors. Misclassification of the employees will put you in legal trouble as you end up paying the wrong taxes. Henceforth, it is very important to properly classify the employees and segregate them as per their categories.

Not Chasing Late Payments

Most of the business owners forgot to keep track of late payments. For a nourishing and successful business, it is important that you get paid on time for your services or products. However, sometimes, the customers pay you later. And often, these payments get untracked by the business owners. To overcome this
bookkeeping error, most bookkeeping applications offer a unique feature that reminds you of late or upcoming payments.

Not Tracking Reimbursable Expenses.

Often, small businesses pay from their pocket or from their credit card. However, they often fail to keep track of these expenses. Usually, these expenses are reimbursed. However, they fail to submit the expense for reimbursement. The failure of these reimbursements is not only a loss in money, but you also have to bear the loss of tax deductions. Henceforth, it is advised to keep track of these reimbursable expenses.

Bad Cash Management

Small businesses deal with a limited amount of cash. However, managing the cash involves a lot of factors, such as the amount receivable, loans, and more. Often, businesses fail to keep track of their finance. However, ignoring the cash flow will result in problems.

Also, apart from that, make sure that your customers are aware of your payment terms and conditions.

Say No to Book Keeping Mistakes With Us

Bookkeeping is the unavoidable crucial task that is necessary for maintaining good financial health for your business. By paying a little extra attention, businesses can easily overcome the common mistakes in bookkeeping. If you are ready to avail of bookkeeping services, we will help you. We assure you the fastest, most reliable, and most trustworthy bookkeeping services from experienced professionals at +1-866-408-0444. Our services are highly cost-effective and help in the growth of your business.

Business

Explaining The Top 8 Payroll Management Tips For Small Businesses

January 20, 2023 admin

Payroll management tips for small businesses are the most tedious, daunting, and time-consuming aspect of every business. Even for the experienced team, managing payroll can be the toughest process to handle. Even a slight oversight can result in massive labor and lawsuit violations. Henceforth, it is essential to manage payroll effectively.

Payroll is a monotonous and time-consuming aspect of every business. However, in spite of its difficulties, it is the most important aspect that requires a lot of attention and focus. To lower payroll problems, most companies make use of Payroll management software. But, using the payroll management software is not an easy task. Most individuals screw up while using the Avant grade application.

8 Payroll Management Tips For Small Businesses

The payroll management process encompasses the entire process of calculating employees’ salary/wages, taxes, and withholdings. It withholds the financial documents of your business. The software performs everything from holding your employee’s information to accomplishing complicated payroll tasks. However, it is important to understand the proper way to use the application.

Let us have a look at the Payroll management tips For small businesses.

Select the appropriate software
Set A Budget
Outline the Payroll Process clearly
Know the payroll deadlines
Categorize the Employees properly
Review the Information for Accuracy
Understand and Abide By-Laws
Decide the Pay Schedule and Salary status

Now, let us have a detailed look at each of the payroll tips and tricks.

1. Select the Appropriate Software.

The market is flooded with various payroll management software such as QuickBooks payroll, Gusto, Sage, Just Work, and more. Though most of the applications are cost-effective and easy to use, you must select the appropriate software that best fits your business requirements. Before choosing the payroll management software, you must check the mobility, tools, integration, and user-friendliness. Also, you must select the easy-to-use software; otherwise, you will end up investing in how to learn payroll management software.

2. Set A Budget

Setting up the budget in the payroll management system plays an important role. It is a good idea to make sure that all wages and taxes paid must be included in the budget. As such, there is no fixed percentage that you must follow while budgeting in payroll; henceforth, you must consider your business requirements and necessity. Also, do not forget to set your budget constraints while buying the payroll management application.

3. Outline the Payroll Process clearly.

No matter the size of your business, the proper documentation will serve your business in the long run. It is mandatory to keep the proper records of every employee, their wages, and payroll reports. The well-documented payroll process will have the below-mentioned documents:

Form W 9
Form W 4
State W 4
Tax Compliance
Retirements plan
tax Deposit timings
Tax rates (state and federal)

Apart from that, you must outline your payroll processes and policies clearly. It will avoid the later chaos in life. Also, it ensures that from HR to employee, every single employee is on the same page and is aware of the process.

4. Know the payroll deadlines.

Being aware of the deadlines makes the payroll process much easier. It is recommended that you meet the tax deadlines in order to avoid the penalties. Also, keep the W2 deadlines on priority, as you can not file for an extension, just like income taxes. You must set the alarm to remind you of the deadlines. Working ahead of deadlines will help you file accurate information.

5. Categorize the employees properly

As a business owner, you must categorize your employees properly. You must categorize them as an independent contractor, full-time employees, or hourly pay employees. This helps you in calculating and deducting the accurate payable taxes. For the permanent employees, you must take care of their overtime and the minimum wages payable. However, this is not true for the independent contractors.
Also, the wrong taxes will land you in trouble.

6. Review the Information for Accuracy

There are chances of mistakes when entering the information in the system. These small mistakes can cost you in dollars; hence, it is essential for business owners to take care of these mistakes. Or you can hire a professional who takes care of your payroll system and runs a complete audit of payroll.

Also, make sure that the information entered in the payroll is safe and secure. The payroll information holds critical and sensitive data such as employee name, social security number, salary amounts, bank account, and address of an employee. So, make sure that it is not accessed by every employee or outsider. Proper data security measures must be implemented to ensure that the sensitive data is not stolen or misused.

7. Understand and Abide By-Laws

No matter how small or big your business is, it must abide by state and federal laws. Make sure that the payroll rules and regulations must be fulfilled by your organization. As the payroll laws are a little bit complicated and differ a little bit from state to state, make sure that your business payroll system is in compliance with these laws. In case you feel stuck, then you can take the help of an expert to understand the latest laws.

8. Decide the Pay Schedule and Salary status.

Most small business owners make mistakes in deciding the pay schedule and salary status, which leads them into trouble. Henceforth, make sure that you follow the payroll laws. Let us have a quick look at both of the terms.

Pay schedule

Also known as pay frequency, it simply means that how often you pay your employees. It is advisable you must meet the minimum paycheck laws of your area. Mostly, the pay frequency is weekly, bi-weekly, or monthly. You must pay your employees on time, irrespective of the time period you pick.

Salary Status

It simply means how salaries are computed. You must pay the right salary as per the employee’s position.

Related Page: Tax Saving Tips For Small Businesses

Tackle Payroll with Us

Handling the payroll is the most hectic task for most small business owners. However, with the right tactics, you can easily manage the payroll process. To avoid penalties and fines, you must constantly check the new tax laws and create new payroll policies to ensure compliance. If this is too much for you to handle, do not worry. We will help you in effectively handling the payroll problems to a hassle-free business query. Our experts at +1-866-408-0444 will help you in staying at the top.