By: vish ks
Submitted: 2010-04-22 05:56:56 | Word Count: 539
The business owner who does everything by himself is likely to be called a paranoid, one who will never grow beyond a certain limit. One has to prioritise the bookkeeping tasks in order to reap its full benefits. The least costly and best results can be obtained for small businesses by having an employee who doubles up as a clerk or receptionist, in addition to doing routine data entry and bookkeeping. He should be creating invoices, receiving payments, entering various bills and preparing cheques. Payroll activities have to be outsourced to some payroll service provider. Doing bookkeeping all by you sometimes add up the costs of preparing tax tables, doing software upgrades, routine checks, and the time it takes, apart from IRS penalties, as one will see. One may hire a freelance accountant, not a CPA, to work for you once or twice a month to reconcile the bank statements, to balance the accounting books, to fix the overlooked errors, to make the month end adjusting entries, to sit down and mull over the monthly financial reports and statements with the owner. All these are in addition to explaining everything that is going on in the business to the business owner.
The rates charged by these bookkeepers per hour depend on their experience and education. It is invaluable if you have another pair of eyes to look after the financials every month, and then to make recommendations on how to save money. During the year-end, time, the CPA collects the year-end bookkeeping financials from the freelance accountant. He will review the accounting books, collect any other information needed to do the taxes or depreciation, and then will make a few closing entries. The most expensive work, obviously carried out by the CPA, is minimized. And, it is imperative that a CPA does all the taxes. This is because his job is to keep himself updated on all the constantly changing laws since no one else has the capability to do that.
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As a warning, do not allow bookkeepers to sign cheques, and that must be the owner's job. Also, as and when you get the cheques to sign, in order to pay the bills, get the receipts of the bills as well. This way, you can analyse and see to whom you are paying, and can question aspects that are unknown to you. Also, be insistent that bank statements come to you straight and unopened. Make it a point to open them by yourself and wade through the cancelled checks to look for ones you did not sign. Do not be under the impression that the bank is going to check this; they will not anymore. All other things can be done all by you. If you make bank deposits, you should be carefully watching the accounts receivables. To put it in another way, you should double-check the clerk, by not donning the dress of a clerk. The most expensive help might get minimized without compromising on quality, and there is an opposite side as well.
