Understanding Account Reconciliation

When you confirm that the balance in your checkbook is in sync with your corresponding bank statement, it is known as account reconciliation.

Any record that you keep regarding your financial transactions with banks, credit card companies, or retail stores is known as an account. It is an arrangement between buyers and sellers in which payments are to be made in the future. The different forms of payment are checks, bills of exchange, and promissory notes. These are transferable, signed documents, which guarantee to pay the bearer a sum of money at a later date.

Purposes of Account Reconciliation
Account reconciliation makes available a suitable method for reconciling the accounts to the monthly financial reports produced by the Financial Records System (FRS). Account reconciliation helps you evaluate departmental account records in regards to the reports, which have been generated by the FRS. This helps you to better verify the accuracy of each account statement. The person in charge of each account should verify the account every month. Account reconciliation helps ensure accurate reports on the account. It helps to identify errors and inconsistencies in your accounting.

In order to perform the reconciliation most efficiently, you should be certain that the person in charge of an account maintains full and accurate records. It is your choice to maintain the records in a manual filing system or on a computer program. You can develop your own filing and record keeping system. It should be capable of providing an effective means of reconciling your accounts on a monthly basis. You can make use of the following files to make the reconciliation process easier.

Open Transaction Files: These files hold all source documents that you may have started for the account, but have not yet processed. Some common types of source documents are Distribution of Deposit forms (for cash receipts), Check Requests, Purchase Orders, Prepaid Purchase Orders, Interdepartmental Billing Forms, Merchandise Orders, and Travel Authorizations.

Pending Files: These files hold source documents that had some activities posted on the FRS report, but await further activities before they can be completed. These include Purchase Orders, Inter-departmental Billing Forms, Travel Authorizations and Travel Expense Reports.

Closed Transaction Files: These files hold the source documents that are fully processed in the FRS. You can always refer to the Records Retention Policy to establish how long documents must be maintained on file.

Monthly Reports: You receive these after the end of each month. The accounts must be reconciled to the monthly reports. The FBM090, Account Statement, and the FBM091 and Report of Transactions can be handed over to the person handling each account. You then compare the open transaction and pending files to the FBM091 and the Report of Transactions, which has a detailed list of transactions posted in a particular month. Make a comparison of the source documents with the report to find out if the encumbrance was properly established, adjusted, or canceled in the correct account and the correct object code.

Additional Help
Software is available to help you in reconciling your accounts in an automated fashion. Apart from providing you with all the help, they are reasonably priced as well.

When you confirm that the balance in your checkbook is in sync with your corresponding bank statement, it is known as account reconciliation.

Any record that you keep regarding your financial transactions with banks, credit card companies, or retail stores is known as an account. It is an arrangement between buyers and sellers in which payments are to be made in the future. The different forms of payment are checks, bills of exchange, and promissory notes. These are transferable, signed documents, which guarantee to pay the bearer a sum of money at a later date.

Purposes of Account Reconciliation
Account reconciliation makes available a suitable method for reconciling the accounts to the monthly financial reports produced by the Financial Records System (FRS). Account reconciliation helps you evaluate departmental account records in regards to the reports, which have been generated by the FRS. This helps you to better verify the accuracy of each account statement. The person in charge of each account should verify the account every month. Account reconciliation helps ensure accurate reports on the account. It helps to identify errors and inconsistencies in your accounting.

In order to perform the reconciliation most efficiently, you should be certain that the person in charge of an account maintains full and accurate records. It is your choice to maintain the records in a manual filing system or on a computer program. You can develop your own filing and record keeping system. It should be capable of providing an effective means of reconciling your accounts on a monthly basis. You can make use of the following files to make the reconciliation process easier.

Open Transaction Files: These files hold all source documents that you may have started for the account, but have not yet processed. Some common types of source documents are Distribution of Deposit forms (for cash receipts), Check Requests, Purchase Orders, Prepaid Purchase Orders, Interdepartmental Billing Forms, Merchandise Orders, and Travel Authorizations.

Pending Files: These files hold source documents that had some activities posted on the FRS report, but await further activities before they can be completed. These include Purchase Orders, Inter-departmental Billing Forms, Travel Authorizations and Travel Expense Reports.

Closed Transaction Files: These files hold the source documents that are fully processed in the FRS. You can always refer to the Records Retention Policy to establish how long documents must be maintained on file.

Monthly Reports: You receive these after the end of each month. The accounts must be reconciled to the monthly reports. The FBM090, Account Statement, and the FBM091 and Report of Transactions can be handed over to the person handling each account. You then compare the open transaction and pending files to the FBM091 and the Report of Transactions, which has a detailed list of transactions posted in a particular month. Make a comparison of the source documents with the report to find out if the encumbrance was properly established, adjusted, or canceled in the correct account and the correct object code.

Additional Help
Software is available to help you in reconciling your accounts in an automated fashion. Apart from providing you with all the help, they are reasonably priced as well.

Article Source: http://www.redsofts.com/articles/

David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site
http://www.smallbusinessconsulting.com

How to Eliminate the Frustration from a Small Business Owner

If you are the owner of the small business company you always have heaps of work, regarding your company finances. The fact is there and still do you need to go to the professional to take the stress off your shoulders?

Visiting with your personal accountant is similar to going to your dentist. Time is money; the longer you delay your visit the more it will cost you.

First you need to know how to set up your business and to consider advantages and disadvantages of every business entity (LLC, Partnership or C Corporation, etc).

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Small Business Offshore Accounting - Myths v/s Realities

To increase the efficiency and profitability of the business small business and big business both equally off sourcing their work mostly their Accounting work. But still There are some myths about accounting business process outsourcing; particularly among small business entrepreneurs who are still not sure whether such step can really create value for their enterprise, as in their perception, only big business can benefit form these initiatives. Confusion still prevails on selection of accounting functions that can be outsourced to maximize returns. But, the fact remains that accounting business process outsourcing is absolutely viable for small businesses too and has tremendous possibilities of cost saving and value. This article explores them one by one:

Myth: Accounting Outsourcing is exclusively for Big Business Reality: Small Business equally can share their the same stage in Accounting Business The popular perception that accounting outsourcing is only for big business with abundant wealth, profound resources and multiple locations is misleading. The fact remains that small business can reap great returns too by outsourcing accounting functions. In today’s fiercely competitive global industry, every second and every dollar that you save is very important for your business. By outsourcing non-core business activities like Bookkeeping, Accounts Receivable, Accounts Payable, Accounts Reconciliation, etc, to destinations like India, China, Philippines, etc, where there is abundance of technically skilled manpower at almost one-tenth labor cost as that of US, small business organizations can save substantially on operational costs. Simultaneously, they generate more time to devote to core business issues like procuring orders, improving technology and raising resources.

Myth: Accounting BPO has no place in Offshore business
Reality: False. Accounting BPO can be outsourced
After its start a decade ago, big business houses mostly outsourced transaction processing activities using high-end technology platforms. The situation has now totally changed. Big and small companies routinely outsource Accounting, HR, Financial Services, PR and similar functions to cost-effective destinations like India. Accounting is particularly a domain that has witnessed tremendous growth over the past few years and has immense possibilities as small business entrepreneurs with strong sales often need a full-time bookkeeper to oversee the books. But, in fact, such services have little to do with the volume of sales and more to do with the level of accounting activity, such as invoicing, bill paying, payroll and the like. Companies with a full-time bookkeeper can save about $30,000 a year by using outsourced bookkeeping services to highly competent service providers in India.

Myth: Complex IT integration is needed
Reality: Just a Server and Internet Connectivity can work
It’s a misconception among small business that outsourcing requires extensive IT integration. For management of outsourced accounting portfolio of a small business, just server and Internet connectivity is sufficient to procure value-added services. The outsourced service provider can use Remote Server model to access client’s computer securely to perform services like Bookkeeping, Accounts Receivables, Accounts Payables, Tax Returns, Account reconciliation etc. In the Secure File Transfer all the accounting records are transferred securely from customer’s computer to the outsource vendor to perform the work. After performing the work the offshore vendor will upload the files back into customer’s computer securely.

The trend has risen sharply as more and more companies are increasingly outsourcing accounting and financial services and the sector is growing very strongly. An IDC study entitled US Finance and Accounting Outsourcing Market Forecast and Analysis 2003-2008 has predicted that the global market for finance and accounting outsourcing services, which reached over $30 billion in 2003, will reach $47.6 billion in 2008.

Myth: Accounting Outsourcing is not secure
Reality: False. The services are 100% Reliable
No offshore service provider would risk his business possibilities by unauthorized use of accounting data of the outsourcing company. Through secure FTP software, offshore units transfer all the documents securely into the client server. Using customer specified accounting software; the client performs all the work and export the finished accounting files back in to customer's server securely. The customers will import the accounting files into their Accounting Software. Thus there is no possibility of any breach of data security.

Most accounting packages involve general data handling like daily sales figure, preparing an outstanding statement, maintaining expense register, preparing tax returns etc. Small business outsourced accounting services do not ordinarily involve handling of business critical data. Even if they are there, a reliable service provider with proven experience and credentials can handle the assignment with trust and confidentiality to secure efficiency and cost saving for small business units.

Myth: Accounting BPO harms economy of outsourcing country by cutting jobs
Reality: False. It promotes Growth and Efficiency
Small business outsourcing accounting services is a major budget-balancing act and an option for increasing business returns and lowering process time that does not call for job losses. The efficiency gained through fast and less expensive outturn makes end-price competitive. More products at affordable prices improve consumer dynamism and ultimately, everybody; from the manufacturer to the customer to the government accrue significant benefits. This is particularly more relevant for the small business sector because by outsourcing functions like accounting, they can save costs without compromising on quality and channel this cost saving to hiring people for operational areas to increase productivity and market sales. Ultimately, there is no loss of employment opportunities. Moving away from non-core functions, jobs become available in high-end sectors and to meet the requirements of such jobs, levels of professional expertise, skills and knowledge of the human resource base of the country increase significantly. The host country is the ultimate gainer from outsourcing.

Small business outsourced accounting has immense possibilities to secure greater business efficiency and higher returns and is proven all over the world. Highly enabled service providers aided by cutting-edge technology in offshore destinations can provide extremely reliable and value-added accounting services to ensure greater returns for small business. It’s a trend that will altogether change the face of doing small business for good.

Article Directory: http://www.articlecube.com

Mani Malarvannan is cofounder of Cybelink, a company specializes in small business financial and accounting outsourcing like Bookkeeping, Tax, Accounts Payable, Accounts Receivable, etc. For more info visit www.cybelink.com

Get Tax Deductions

Are you a small business owner who is planning on preparing your own taxes this year? If you are, you may want to know about the business deductions that you can claim. You may be happy to know that there are a number of deductions that you may be eligible for. Just a few of those deductions are touched on below.

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Get a better way for maximum utilization of resources with bookkeeping outsourcing

Outsourcing has become an integral part of many businesses and residual are planning to adapt it. As the popularity graph of outsourcing services is elevating, business owners are outsourcing most of their important but tedious tasks. Bookkeeping is also one of such tedious tasks that require perfection and accuracy as a slight error in entries can cause a big problem. Though business owners pay high attention to bookkeeping tasks and they tally each and every entry carefully but every time it is not possible for business owners to give proper time to check all entries thoroughly. In such circumstances risk of accruing mistake may increase and the whole organization can get affected by this. Outsourcing services help businesses in conquering such problems by offering businesses bookkeeping outsourcing facility.

Bookkeeping outsourcing is all about utilizing human resources from outside the company to take care of day to day and monthly bookkeeping records. The task of bookkeeping that the company used to perform itself with its accounting professionals becomes very easy after outsourcing. That hired bookkeeping outsourcing firm or professional performs every bookkeeping task of that company and also prepares a report on monthly or weekly basis. Bookkeeping outsourcing services involve day to day transaction, record keeping, account maintenance and tax assessment. Not only this, if you are a new business owner and want advice regarding financial activities you can also get best advice from these professionals.

The only purpose of bookkeeping outsourcing services is to benefit businesses. Whether it is daily record keeping or annual financial statement preparation, an outsourcing firm accomplishes very task carefully. In this outsourcing process client organization and service provider go through in a contractual agreement process regarding quantity of work and charges. That agreement makes everything clear to both parties so that any hurdle may not come in the way of smooth processing of bookkeeping tasks. By this you can be rest assured that nothing is going to affect your bookkeeping procedure. The biggest advantage of bookkeeping outsourcing that it is very cost effective and helps in reducing the overhead of your accounting staff salary. Some companies fail to earn estimated profit as they secure a big part of their budget on salaries of accounting professionals which leads to an annoying profit and loss account as the profit is very less in comparison to overheads. If you are worried about the high charges of bookkeeping professionals or firms then stop pestering because there are many service providers that offer reliable and cost effective bookkeeping services. Bookkeeping outsourcing is an excellent way to keep an eye on all accounting activities. It not only offers business owners reliable accounting solution but also gives businesses an ample scope to grow. The decision of outsourcing bookkeeping activities can be prolific if made only after proper research. It is better to take help of internet to make a sensible decision as you find a wide variety of service providers there from which you can select the most suitable option for you.

About the Author
Michelle Barkley is a CPA who advises people on tax preparation and tax calculation.She specializes in Bookkeeping outsourcing,Tax return preparation,back office outsourcing and Outsourced Accounting.To know more about Accounting outsourcing services and to use the services visit http://www.ifrworld.com/

Source: http://www.goarticles.com/

Bookkeeping and Accounting Basics

Bookkeeping and accounting share two basic goals:

• to keep track of your income and expenses, thereby improving your chances of making a profit
• to collect the necessary financial information about your business to file your various tax returns and local tax registration papers

Sounds pretty simple, doesn't it? And it can be, especially if you remind yourself of these two goals whenever you feel overwhelmed by the details of keeping your financial records. Hopefully you will also be reassured to know that there is no requirement that your records be kept in any particular way. (There is a requirement, however, that some businesses use a certain method of crediting their accounts. See " Cash vs. Accrual Accounting.") In other words, there's no official "right" way to organize your books. As long as your records accurately reflect your business's income and expenses, the IRS will find them acceptable.

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How To Turn Bookkeeping Drudgery Into A $175/hour Part-Time Job

For most self-employed people, bookkeeping is about as much fun as a root canal. But like it or not, it must be done, otherwise you'll end up overpaying your taxes big time.

Perhaps this article will help you see this tedious task in a new light. Follow along with me and I can turn your bookkeeping nightmare into the best paying part-time job you ever had.

First, a question:

How much money do you make right now -- per hour -- at your "regular" daytime job or in your business?

Is it $15 per hour? $25 per hour? $50 per hour? Make a mental note of that amount, ok?

Now, let's say by "keeping the books" this month, you record $1,000 worth of deductible expenses.

Let's also assume you are in the 35% tax bracket (15% federal income tax plus 15% self-employment tax plus 5% state tax).

So, for every $1,000 of deductions, you save yourself about $350 in taxes ($1,000 x 35% tax rate).

One more assumption: it takes you about 2 hours to properly record and document that $1,000 of deductions.

Hmmm. You spend 2 hours and save $350 bucks.

How much money did you just make for yourself -- per hour?

$175 per hour! Whoa -- now, compare that to how much you make per hour working in your business or at an employee job. Which "job" paid you more?

Even if it takes you 4 hours -- it's like having a job that pays you $87.50 per hour. Still a pretty good hourly wage, don't you think?

How does that make you feel about bookkeeping? Not such a bad deal after all, is it?

So here's a simple six-step bookkeeping system that will put thousands of dollars of tax savings in your pocket and keep the IRS out of your life.

1. Maintain a separate bank account for your business or self-employment activity.
   
   Never use your personal bank account for business expenses. Having a separate bank account automatically creates the "shell" for the perfect documentation system.
   
   If you don't have a separate business bank account, now is the time to get one.
   
   
2. Maintain a separate credit card account for your business. Same deal as the bank account -- pick one credit card that you use exclusively for business expenses.
   
   
3. These 2 accounts (one bank account and one credit card account) should only be used for business! Never "co-mingle" business and personal financial information.
   
   The only income that goes into your business bank account is business income. The only expenses that are paid from the business bank account and business credit card account are business expenses.
   
   
4. For each major income and expense category, create a simple filing system each calendar year -- one file folder for each major category. Every time you write a check or use the credit card for a business expense, you assign that expense to the appropriate expense category and file the supporting documentation (receipt, invoice, cancelled check, or whatever) into the corresponding file folder.
   
   
5. Keep a separate file folder for all monthly bank account statements and credit card statements.
   
   
6. Use a simple bookkeeping software program to record all deposits, checks, and credit card charges. Once a week or once a month, input all transactions and assign each transaction to the appropriate income or expense category.
   
   

The importance of this "categorization" process cannot be stressed enough -- it's the key to the whole system!

There are any number of software programs out there for this purpose. I've used them all: Quicken, Quickbooks, Money, etc. Spreadsheet programs like Excel can also be used to automate business record-keeping.

But my favorite bookkeeping program for the Small Business Owner or Self-Employed Person is InternetTaxHelper -- it is by far the easiest to learn and simplest to use. If your business grows, you can always invest in a more sophisticated program later. For any small business owner, especially if you're just starting out, this is the best program I've ever seen.

Using a software program is a tremendous time-saver. Once you've input all your individual income and expense transactions, and assuming you've assigned each transaction to the appropriate category and filed the paperwork, you've already completed all the work necessary to audit-proof your income tax return!

One final comment: If you aren't "computer-savvy", that's OK. You can still use good ole pencil and paper to categorize your business expenses.

I have clients who use nothing more sophisticated than a spiral notebook. Each year they buy a new notebook and label each page with a particular income or expense category.

Every transaction gets written down in the notebook on the appropriate page. At the end of the year, they add up the totals for each page, and presto, they give me an annual recap of all major income and expense categories. Get the picture? It doesn't have to be fancy. It just has to be in writing, accurate, and supported by actual paper documents.

Whether you use your computer or not, the end result is the same: Every single transaction has been assigned to the appropriate category, and every transaction has the corresponding "paper trail" -- every receipt, invoice, cancelled check and credit card charge has been filed into the appropriate file folder. Should the IRS question any income or expense amount on your return, you'll be ready!

About the Author:

Wayne M. Davies is author of 3 tax-slashing eBooks for small business owners and the self-employed. For a free copy of Wayne's 25-page report, "How To Instantly Double Your Deductions" visit http://www.yousaveontaxes.com/

Source: http://isnare.com

Bookkeeper accused of embezzlement

A cautionary tale in the Internet advertisement Rohnert Park resident Nilla Billa uses to promote her in-home business warns about accountants "cooking" a client's books.

Now authorities say Billa is suspected of wrongdoing in her job as bookkeeper with a Novato-based company specializing in employment screening and background checks.

Novato police believe Billa misappropriated at least $700,000 from Employment Screening Resources during the past two or three years, Sgt. Dave Jeffries said.

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Beall's Hill audit finds sloppy book keeping, no impropriety

A long-awaited audit of the effort to revitalize the Beall's Hill area found poor record keeping and inadequate oversight, but no misuse of funds, as some public officials had feared when commissioning the audit last year.

The audit found that the corporation's financial statements "present fairly, in all material respects, the position of Beall's Hill Development Corporation," according to a letter from the auditing firm, McNair, McLemore, Middlebrooks & Co. But the letter addressed a number of problems, particularly that "the corporation's files were incomplete and did not contain documentation to substantiate the majority of the activity of the corporation."

Despite that, the remaining two members of the corporation's board said the audit will allow the revitalization effort to move forward.

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Cost Benefit Analysis-Whether you should outsource your Bookkeeping to Professional Book Keeper.

What is a role of a bookkeeper in your organisation : BOOKKEEPERS keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks. Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills.

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Telecommuting Idea – Bookkeeping

If you have experience in accounting or have worked as a bookkeeper before, bookkeeping can be a great way to work from home. Small businesses are continuously looking for ways to outsource some of their workload and most of them do not need a full-time in-house bookkeeper. You can approach several businesses in your area and offer to keep their books.

Of course there are some tools you need. You should have some of the basic accounting software like quicken and quick books. If the company you work for uses a different piece of software, they may purchase a copy for you to use at home, or make one of their current licenses available to you. In the beginning I suggest you focus on companies that use software you are already familiar with since you will be working from home and don’t have the opportunity to ask a colleague across your desk for help.

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Keeping Up With The Family Finances

Staying on top of the family finances does not have to be difficult. With a little planning, your finances can be kept up to date with ease. Believe me, having a handle on your family finances goes a long way in creating family harmony.

The first step is to set up a bookkeeping system. We’ve used Quicken software for years. It has helped to keep track of our expenses, and we have been very happy with the program. It takes a little bit of time to set up initially. The second part of your bookkeeping system involves setting up a place to save your receipts. We use a small cardboard divider file with a special slot devoted to “receipts that need to be posted”. The key idea here is to have a place where you store all receipts from expenses (including ATM withdrawals) so that they are readily available when you go to enter them into your bookkeeping software.

Once you have the system set up, then you simply enter your receipts, whether income or expenses. As you enter each item, you select a category for it to go into. Reconciling your account is done online. One of the greatest advantages in using an automated system like this is the ability to see your expenses by category. With the click of a button, you can find out what you spent on groceries, entertainment or any other category for any time period, like last week, last month, or the last quarter. Many other reports are available such as a cash flow report and an itemized categories report. Using this system has streamlined our ability to keep our account updated. Bills are easily paid on time.

Once you’ve established your bookkeeping system, then you must set aside time on a regular basis to update it. For our family, we’ve found that a weekly update works well. My husband and I alternate weekly turns on posting receipts and then reconciling our account. It never takes us more than 30 minutes at a time and our account is always balanced.

If you are behind in your finances, start by doing just 15 minutes at a time. You’ll catch up eventually. Then, be sure to make time on a regular basis to keep up with your account. Having your finances in order is a real stress reliever and can be attained by anyone!

About Author:
For money saving tips and money management ideas, be sure to visit http://www.NotMadeOfMoney.com

Article Source: http://www.BharatBhasha.com

Twenty-five Steps for Evaluating & Selecting the Right Accounting Software Package

Selecting the wrong accounting software can be a complete disaster. You could even lose your job or your business by making a poor choice – it has certainly happened many times before. Exactly where can you go to get the information you need to make the right decision? There are trade shows, seminars, and magazine articles on selecting accounting software, but they typically just tell you the good stuff. The accounting software publishers at conferences and other similar shows will provide you with a fancy brochure and show you what they have to offer, but the truth is that it is almost impossible to tell what’s missing or what’s wrong with the product. The Value-Added Resellers (VARs) will come to your office to demonstrate the product, but they usually skip over the negative points and weaknesses as well. The magazine articles all seem to gloss over the bad stuff in fear of chasing away advertising dollars.

Too often it takes a complete installation of the system and at least a month of operations to tell if the product will meet your needs – and by then, it is too late. There seems to be no independent place to go to get good help with avoiding the wrong package. This is a problem that everyone faces when selecting accounting software. The good news is that almost all accounting software packages have gotten better over the past decade, and it is now easier to end up with a fairly good product than it used to be. But still, here are some important steps you should follow when selecting accounting software:

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Why Outsource Your Bookkeeping to a Part-Time Bookkeeper?

There are many good reasons to hire a part-time bookkeeper. A good bookkeeper will:

Save You Money:

Efficient bookkeeping. A knowledgeable bookkeeper will get your bookkeeping done quickly and efficiently, meaning less time spent on bookkeeping.

Decreased employee costs. You only pay a part-time bookkeeper when they are actually doing bookkeeping. You don't pay benefits to your part-time bookkeeper and you don't incur payroll taxes or the costs of training and turnover.

Decreased accounting costs. By increasing the accuracy of your books, an experienced bookkeeper will save you money at tax time.

Allow you to Focus on Your Business:

By turning over your bookkeeping to a qualified bookkeeper, you can focus on your expertise: running your business.

Provide Useful Feedback:

A skilled bookkeeper will know how to structure your books in such a way as to provide the maximum feedback on your business results.

Need a Bookkeeper? Search Samarak's Directory of Bookkeepers and/or list the position on Samarak's Bookkeeping Jobs page.

Source: http://www.samarak.com/bookkeepingservices.htm/

10 Bookkeeping Mistakes Made by Small Businesses

I ran across this article at AllBusiness.com and thought it was interesting. It highlights some of the top bookkeeping mistakes made by Small Businesses.

From one-person entities to major corporations, bookkeeping is a significant part of any business endeavor. While it is typically not one of the more glamorous jobs, bookkeeping is at the heart of a company’s success, and errors can cost the company significantly. Below are 10 of the most common errors that you want to avoid.

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Cost Benefit Analysis-Whether you should outsource your Bookkeeping to Professional Book Keeper.

What is a role of a bookkeeper in your organisation :
BOOKKEEPERS keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks. Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills. These type of jobs are found in every industry and may have various job titles, such as accounts payable clerk, accounts receivable clerk or assistant bookkeeper.

Cost of a Bookkeeper :
The pay for these jobs depends upon experience, clerical skills, the level of responsibility and the job location. Beginning salaries go from minimum wage to $ 15 per hour. Experienced Bookkeeper can make $ 20 an hour. After having worked for three years with the same firm, a Bookkeeper can earn at $ 25 per hour. A Bookkeepers usually work 40 hours a week; sometimes it may be necessary to work overtime. Some employers have fringe benefits such as paid vacations and sick leave, life and health insurance, and bonuses. Other benefits that the employer may include are participation in a credit union, or retirement and profit sharing plans.

Advantage of outsourcing Bookkeeping work to a professional bookkeeper :
There are several distinct advantages to outsourcing your bookkeeping functions. First and foremost is saving money. You get what you pay for and if you don't pay for quality than you won't have quality service. However, you can save money by outsourcing because you won't be paying for employer payroll tax expense, workman's compensation and general liability insurances, vacation time, sick time, health insurance and other benefits a good full time bookkeeper will expect from his/her employer. Just remember, however, that these costs will be built into the consultant's hourly rate and their fee will reflect these costs. Any bookkeeping consultant who has not taken these costs into consideration is not a bookkeeper you want - if they don't know enough to include these costs into their fees, then they don't know enough to be a help to your business. You should expect to pay at least three times what you would pay an experienced full charge bookkeeper.

And just how do you save money by paying three times the amount you would pay an employee? Well, let's see. There will be no recruiting, interviewing and training costs for start. And if you should find yourself unhappy with the services there will be no additional recruiting, interviewing and training to replace your bookkeeper. Also, you will not have to be concerned about law suits such as sexual harassment, unlawful firing, age discrimination, sexist, etc. Or an increase in your unemployment rates because you laid off an employee that you really wanted to fire but had no lawful cause to do so. So right away we have less time and money spent and potentially less hassle if things don't go well.

And of course you will not be paying workman's compensation and general liability insurance premiums. Also any worthy bookkeeper will expect at least two weeks vacation, coverage for sick time, health and dental insurance and even perhaps more benefits.

Most professional bookkeepers will have their own offices saving you space within your office. So you will not be buying that extra desk, calculator, computer and computer software. Your bookkeeper will be providing all of that as part of his/her fee. No software updates, computer maintenance, training costs, etc. Of course should you prefer to have your computerized bookkeeping records available to you at your office, a small investment in software installed on your computer makes this possible. Also no office supplies to be paid for. You will be amazed at just how much pens, pencils, and paper can be used by a bookkeeper. Your consultant bookkeeper will either ask you to drop off the work at their office, will pick it up at your office or some may even offer remote bookkeeping service. And by having your bookkeeping done off site, your bookkeeper will be able to work more efficiently and accurately because her/his office will most likely offer less distractions than your busy office. All of this is saving you money.

And the best reason for outsourcing is that you control the amount of money spent on bookkeeping. What I mean by this is that the person you hire to do your bookkeeping will be doing just that - not answering the phone, dealing with drop-bys, chatting to other employees, etc. Also you can start with just a few hours a month and add on when you need to and then adjust downward again should it be necessary. Can you imagine finding an employee to start with only four hours a month, then asking them to put in 20 hours a week for awhile and then back down to four hours a month again. I don't think you would keep them for very long, but a free lance bookkeeper is able to work around these variables and even more importantly expects to work with flexible schedules.

So have I convinced you yet? If so, then just remember "you will get what you pay for". Go for top quality because your financial records are the core of your business and without great bookkeeping you cannot expect to succeed no matter what type of business you have. After all don't you think you are worth it ?


About Bhaskar Thakkar

Mr.Bhaskar Thakkar is a qualified Chartered Accountant and professional bookkeeper from India. He is a president of M/s. BT Associates, Chartered Accountants. The said firm provides Book keeping, Accounting, Auditing and Tax preparation services to various Chartered Accountants in UK, US and Canada. The firm is also specialized in preparation of VAT returns, Payroll Processing. Visit btassociate.com,. A division of said firm provides various outsourcing solutions please visit jobs2india.com., to get more details.

Source: http://www.theleadingarticles.com/

When Choosing Bookkeeping Programs

My organization recently decided to update its bookkeeping programs. Though it will probably improve efficiency in the long term, but presently, it puts me, as the office manager in an uncomfortable position.

Over the years, the firm have tried several bookkeeping programs, but finally settled on Quickbooks, which frankly speaking, I am very indifferent to, but have gotten so used to it in the last few years. We probably won't know the fellow that took the decision to adopt a new bookkeeping program; nevertheless it was a wrong decision.

There was nothing wrong in the existing bookkeeping program, and setting up a new one was created new problems, that has was never envisaged. First, everything had to be recorded to the new bookkeeping programs, and for this task, the boss hired a computer expert, who also happened to be his son.

The task involved writing a macro that will convert all of the files from the old bookkeeping programs into the new one, and unfortunately, the project failed- just like everything the boss and his family do, on top of this is the problem of lack of compatibility between the QuickBooks and the new bookkeeping programs, which was a kind of general public access thing that was obviously produced by Linux nerds in their spare time. Though it is very stable and well coded, it is just not a user friendly interface.

Of course I bore the brunt of the whole thing, so I had to learn how to operate this graphics free, all text interface, before entering the old bookkeeping program data. Of course the new program is more stable, and perhaps faster, but the point is it is boring and takes a longer period to learn.

Even now that I have a full grasp of it, I still prefer one of the bookkeeping programs where I can click on a few icons and not bother about keyboard shortcuts.

I resent this new program because I will have to use it all day, so I think I deserve something pleasant to work and interact with.

But it seems no one is interested in that, as long as it is free, fast, and occupies less hard disk space, then it will do just fine.

About the Author: Kyle Greatbatch Bookkeeping Programs .

Article Source: www.iSnare.com

Understanding Bank Reconciliation

Bookkeeping is fundamental in running your business in an informed way. It is important that you have an organized, transparent and updated bookkeeping system in place. One of the ways to keep track of your company's books is bank reconciliation.

What is bank reconciliation?
The procedure of comparing the account balance given by the bank with that of the company's book of accounts and explaining any discrepancy is bank reconciliation. The discrepancy in the balances may be due to the different timing of registering the data in the bank's books and in your company's books. This discrepancy is normal and is rectified automatically within small time. However, sometimes the discrepancy is due to an error, which has to be rectified manually and to catch this error you need bank reconciliation. Companies generally do bank reconciliation at the end of each month.

Reasons for maintaining bank reconciliation
Regular monthly bank reconciliation keeps your company's financial records clear and updated. You never build up an erroneous backlog. Also, you can understand your accounting status all the time. It is important that you have a prompt and reliable communication system with the bank so that you keep your records accurate.

Bank Reconciliation Statement
It is better to prepare a bank reconciliation statement by yourself so that you are able to figure out the causes of discrepancy.

Structure: The statement is divided into two sections. The right section reflects your bookkeeping for bank transactions and the left side reflects the bank's records for your account with them.

Heading: The heading of the statement will have the bank's complete name with the date of reconciliation.

Items: The first item of the statement is your opening balance just before the reconciliation. Check each item of the statement further for the following. If the transaction is missing from you our company's account and it is on the bank's record then you need to enter it in your books. If the bank section has missed it then enter it under their section. If the missing transaction belongs to the bank such as any fees deductions or interest credits, then it is an error at the bank's end and it will rectify the error.

Adjustments: Once the reasons for the discrepancy have been figured out then you should include the missing information in journal entries.

Items of Bank's Statement
Credit: Banks may credit some interest periodically into your account as applicable on the account balance.

Debit: These will be any of the bank charges on your account as applicable.

Erroneous credit: Any incorrectly placed credit in your account is booked under this head. Sometimes, the bank makes a deposit in the wrong account.

Items on Your Account Books
Unpresented check: Your Company's books should record any checks issue immediately at the time of issue. The bank will, however, record it when the check is presented to it.

Software for bank reconciliation
There is a lot of bank reconciliation software readily available in the market. This software is compatible with all the latest accounting packages. The data is automatically imported, checked and reported through the software making your job easier.

David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com

Article Source: http://www.1ArticleWorld.com

Institute of Certified Bookkeepers and Pastel Accounting extend bookkeeping career path

A memorandum of understanding (MOU) signed by Pastel Accounting and the Institute of Certified Bookkeepers (ICB) will help to professionalise bookkeeping in South Africa, by enabling automatic membership of the ICB for bookkeepers who achieve certain qualifications in Pastel Accounting training.

Learners who have completed Pastel Accounting's four-day Pastel Partner 2007 training with a minimum pass mark of 75% will be granted affiliate ICB membership - afICB(SA).

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Corporate Credit Cards: Convenient Bookkeeping

The issuing of a corporate credit card is a great idea, not only from a convenience standpoint, but also from a bookkeeping standpoint. A corporate credit card given to an employee lets that employee use the card whenever it is necessary as a business expense. By issuing a corporate credit card, and having employees use it, allows the company to know how their money is being spent, it allows for extremely easy bookkeeping and you can also most of the time get a lower interest rate because of the corporate credit card status.

Choose Your Company

The first thing you have to figure out when it comes to corporate credit cards is what kind of interest rate you want to pay and that correlates to which company you go with. There are many credit card companies out there and they all offer different rates, different benefits and some are accepted where others aren't. This is all research that must be done before you decide on ordering your corporate credit cards for your employees.

Shop The Various Companies

Research the various credit card companies and find out what they are willing to offer. In fact, call up every corporate credit card candidate that you can find and ask them all the questions that you want answered. Make sure that the interest rate is as low as possible and make sure that it is fixed, or that it won't go up in a few months.

By using corporate credit cards, you can keep better tabs on how your company's money is being spent and it also ensures that there aren't any expenses being reported that aren't company related. Previously, people would turn in receipts for company expenses. Now, that practice is very outdated because the corporate credit cards are itemized on the bill so that you know exactly when and where the company's money was spent.

The Smart Move

With the ease of bookkeeping, and the convenience of being able to use them anywhere, anytime, corporate credit cards are the smart move. Plus, they make it harder to report expenses that aren't corporate related. This makes corporate credit cards the best choice for any corporation doing business today. Call today to shop the various interest rates, find who has the best benefits and make sure that you are getting the best deal possible, for you and your employees.


About the Author
Roland Parris Jefferson III is an online researcher based out of Los Angeles, California. Need more details and expert advice on Credit Cards? Then please visit our Corporate Credit Cards Resource.

Source : http://www.goarticles.com