Business owners should consider hiring the right Edmonton keeping company as one of the most important tasks they can do in their business. The reason for this is because bookkeepers provide entrepreneurs with interim financial statements, that they can then use to make informed financial decisions in their business. The accuracy of those financial statements is extremely important because they can ensure the accuracy of those financial decisions. Since only 11% of entrepreneurs seek help when they need it, they should consider hiring the right bookkeeper in their business as finding help before they needed. If they hire a bookkeeping company that does not have an accounting background or is not very knowledgeable in bookkeeping, not only can it cause their financial statements to be incorrect, but if entrepreneurs use those incorrect financial statements to make business decisions, those decisions can end up causing them financial hardship.
When entrepreneurs are choosing the right Edmonton bookkeeping company for their business, the thing that they need to keep in mind that makes this a little bit more difficult is that literally anybody can call themselves a bookkeeper. There is no professional designation that bookkeepers need to use and no schooling that they have to graduate from in order to be called a bookkeeper. There is no governing body, and so anyone with some basic bookkeeping knowledge can call themselves a bookkeeper. Therefore, entrepreneurs need to be ensuring that there asking the right questions to their Edmonton bookkeeping company, so that they can end up with the right company for their business when that is going to help them grow.
One of the most important questions an entrepreneur needs to ask, is do they have basic knowledge about taxes? Any great Edmonton bookkeeping company will be able to answer that yes they have tax knowledge and experience. The reason this is so important is that if the taxes are not being paid properly, entrepreneurs can face stiff fines from the Canada revenue agency. For example, if an Edmonton bookkeeping company is doing payroll for an entrepreneur, if they do not know what payroll taxes need to be withheld from their staff, and how much the taxes are, that could cause them to pay little payroll taxes. Also, if the bookkeeper does not know when they need to have those taxes paid by, they could end up getting triggered a penalty by CRA not paying the taxes on time. It is extremely important that entrepreneurs pick the right Edmonton bookkeeping company for them, not only so that they can have the best interim financial statements to help them make financial decisions so that they can avoid getting hit with penalties from Canada revenue agency.
Entrepreneurs should try to hire an Edmonton bookkeeping company that has accounting experience, or have worked with accountants in the past. One of the most important reasons for this is that an entrepreneur’s accountant and bookkeeper are going to need to communicate at some point to ask each other question about the financial statements their providing and to help them code correctly, therefore if they choose a bookkeeper that has the right type of accounting experience, they can ensure communication between the two is smooth.
If entrepreneurs are not choosing the right Edmonton bookkeeping company to work on their interim financial statements, they could end up triggering errors and penalties that can be extremely expensive. As Red Adair, the specialist in extinguishing and capping oil well fires has said, “if you think it is expensive to hire a professional to do the job, wait until you hire an amateur.” Hiring a less than knowledgeable bookkeeper can cause all sorts of problems for entrepreneurs. Therefore, they should be aware of their hiring in their business to help them with their interim financial statements, to ensure the have the best bookkeeper possible.
By being familiar with basic bookkeeping and accounting terms, can help entrepreneurs understand if the Edmonton bookkeeping company that they are interviewing for the job has the right knowledge. They will need to hire a bookkeeping company that knows what accrual accounting is. Accrual accounting is referring to the type of accounting that is required whenever the invoice that is provided to a client is paid at a different date and time and when the service or product was provided. Since this is what most businesses use, they need to ensure that the bookkeeping professional that they hire is familiar with it. Some accrual accounting terminology that they are going to need to understand is Accounts Receivable and accounts payable. Entrepreneurs should understand as well that Accounts Receivable is referring to the amount of money that an entrepreneur is owed in their business. They have provided the product or service and have generated an invoice and are waiting for their money. On the other hand, the accounts payable is the amount that the entrepreneur owes. They have received products or services, but have not paid the invoice yet. Very simply put Accounts Receivable is who owes the business money, and accounts payable is who the business owes. The reason why it is important to know this is because there is always a chance of having errors with accrual accounting because of the difference in invoice date and when they receive their money.
Another accounting term that entrepreneurs no in order to help them hire and speak to their Edmonton bookkeeping company is what is bank reconciliation. That is the term used when an entrepreneur is matching the transactions that they made against the transactions that the bank has recognized so far. This is a way that entrepreneurs can see how much money they have to use in their business. If they are looking only at their bank balance to see how much money they have to use, they could end up spending too much money. For example, if they have written in two thousand dollars check, but it has a clear their bank account yet, their bank balance will show as one number, but their bank reconciliation will show them how much money they have in their business minus that check that has not yet been cashed.