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What is Bookkeeping?

Many people think, oh, you do taxes? Nope, that’s an EA or CPA. Or, even worse, you work at a library or place bets on horses? Nope, nope, nope.

What is bookkeeping, anyway?

Bookkeeping is the data side of accounting. It is keeping track of all the income and expenses that flow in and out of a business, in something called the “ledger.” The ledger is just the story of what is happening in the business in the real world. It’s a story that really needs to be accurate.

The life of the business and the livelihood of the business owner depend upon it. Financial reports from the ledger give the business owner, their advisers, banker, CPA, and attorney a snapshot of where the money is coming from, where it is going, how much is on hand, and what is profitable or not.

There are great online accounting programs and associated apps that handle this data, so that data entry is mostly a thing of the past. The trouble is, having a tool is not the same thing as knowing how to use it. Just like you wouldn’t fly an airplane or operate a sawmill without some serious training, so it should be with accounting.

In other words, to err is human. To really foul things up requires a computer. Put those pieces together wrong, and you get the wrong picture, which leads you to steer your business in the wrong direction.

Sure, you can hire your best friend’s second cousin’s niece. But first, make sure they know how to categorize transactions, diligently double-check each month to spot those keying errors and tailor your books to suit your business type.

A professionally-trained bookkeeper can save you more money than they cost. They help you avoid late fees, reduce unpaid invoices, and stop overpaying taxes. Most important, you have more time to grow your business.

You learn where your biggest profit margins are and double down on those activities. You plug those cash leaks fast. For more information, email me at [email protected] to set up a free discovery call!

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