The terms accounting and bookkeeping are frequently used interchangeably. There is a distinction between bookkeeping and accounting, even though many bookkeepers today perform some traditional accounting duties, such as advising customers about their finances.
Record keeping and data management make up the majority of bookkeeping for small businesses in NY. The books are reconciled each month by bookkeepers, who also ensure that the data is accurate.
There are a bunch of things that a bookkeeper or an NY bookkeeping service does. Let’s get into some of the most common tasks.
Common bookkeeping tasks
The tasks that go into bookkeeping for a small business in NY are roughly the same. For smaller companies, all of these might need to be managed internally, but wiser business owners will invest in a bookkeeping agency in New York to help take care of these.
Data entry
Data entry entails inputting the transactions of your company into your bookkeeping system. Much of the data entry now happens automatically, either through OCR or bank feeds, as was already indicated.
However, data input involves more than merely entering the numbers into your software. Proper data entry includes:
Source document verification
Every business needs to make sure that only valid transactions enter your books. This might not always happen when you do your bookkeeping solely form bank feeds. Receipts or bills are the most ideal documents to use to verify if a transaction actually belongs to the business.
Accurate classification of transactions
Proper data entry mean that transactions are being posted to the correct accounts. At least two accounts of the company’s chart of accounts will be affected by every transaction. Accurate classification of transactions enables you to produce financial management reports which can be used to make strategic business decisions.
Accurate identification of transactions
Office management
Office administration duties including payroll, vendor payments, and customer billing. Payroll, accounts receivable, and accounts payable amounts all have an impact on your books, but some of these responsibilities can be handled by an employee other than your bookkeeper. Others, like payroll, can be delegated to separate businesses or New York bookkeeping agencies that are experts in the field.
Make sure you have the right checks and balances in place before letting your bookkeeper bill your customers or pay your vendors and workers to reduce the risk of fraud.
End of period closing
At the conclusion of every accounting period, your books should be closed. Closing out a period includes:
- Balancing every debt, credit card, and bank account
- Balancing the accounts payable and receivable amounts
- Creating any necessary adjusting journal entries for depreciation, deferred income or expenses, or other unexpected events
- Checking the correctness and completeness of the financial statements
- Locking the books to prevent their alteration after end-of-period close is complete
Internal management reports
Internal management reports can be made for your company by your bookkeeper. Three common internal management reports that your accountant can create for your company are as follows:
- Your balance sheet is a picture of your assets, liabilities, and equity as of a particular date. It is your company’s use of the accounting formula: Assets = Liabilities + Equity.
- Your income statement provides information on the revenues and costs of your company during a specific time period. It reveals if your company has made a profit or a loss.
- The income statement and balance sheet are reconciled by your cash flow statement, which also provides an explanation for where the money went.
Stay on top of every bookkeeping task with Melanin Tax
These may be the five most common things a bookkeeper will handle, but there are still so much more things that you need to stay on top of. Instead of using precious time to learn all this, why not let an experienced bookkeeping firm in NY like Melanin Tax help you out.
We have you covered for all of your bookkeeping, tax preparation, and ta planning needs. Businesses small and large can always benefit from a professional bookkeeping service in New York. Call Melanin Tax today and see how we can keep your finances running smoothly!