It is extremely important that entrepreneurs understand exactly what they are Edmonton bookkeeping company does, so that they can not only hire the best bookkeeper for their business but so that they can increase the communication between them so that entrepreneurs can use the interim financial statements provided by their bookkeeper in order to make the best financial decisions possible. Statistics Canada says that only 11% of entrepreneurs seek help when they need it, and by hiring a great bookkeeping company for their business, entrepreneurs can be certain that they will have help in their business if they are able to ask for it.
Something that is important to keep in mind when entrepreneurs are hiring the right Edmonton bookkeeping company for their business, is since there no governing body on bookkeepers, anyone can call themselves a bookkeeper. And as Red Adair, the man who specialized in extinguishing and capping oil well fires said, “if you think it is expensive to hire a professional, wait until you hire an amateur” if entrepreneurs are not careful when they are hiring who works as a bookkeeper in their business, they could end up with improperly done financial statements that could cause errors and be expensive to fix, and if entrepreneurs use those incorrect financial statements in order to make decisions in their business, they could end up making poor financial decisions. That is why it is extremely important that entrepreneurs hire the best Edmonton bookkeeping company they can for their business.
They should be hiring a bookkeeping company that has basic knowledge of taxes. The reason for this is because if the bookkeeper is going to be working on payroll, are going to need to know what payroll taxes they need to withhold from employees checks, they need to know how much and when to remit them. If this is done incorrectly, business owners can find themselves being penalized by the Canada revenue agency for not submitting the right amount in payroll taxes, or submitting them too late. Entrepreneurs need to understand that their bookkeeper needs to have basic tax knowledge in order to do their job well.
Bookkeepers are also going to be helping out an entrepreneur if they get audited by the Canada revenue agency. Therefore, it is very important that their bookkeeper keeps extremely organized records such as receipts, expenses, and invoices. They need to be sorted by date and filed properly. Because a company that gets an audit request from the Canada revenue agency, they only have thirty days to respond, so having a great bookkeeper who is very organized is vital to an entrepreneur being able to respond to the audit request in a timely fashion.
It is extremely important that entrepreneurs hire the best Edmonton bookkeeping company they can for their business, because their interim financial statements are too important to be left incorrect, and left to their accountant to fix. Not only can this cause entrepreneurs to have to fix errors, little cause them to pay for their bookkeeper, and then pay their accountant to do their bookkeeper’s job.
The more important thing that an entrepreneur will have to decide in their business, is what Edmonton bookkeeping company they are going to hire for their interim financial statements. A common mistake that entrepreneurs that are new in business often make is thinking that their accountant in their bookkeeper does the same job, so they either do not need to hire a bookkeeper, or they do not need to hire a good bookkeeper. Not only is it very important that entrepreneurs hire a bookkeeper in their business, but they need to be able to hire an extremely good one. The reason for this is because entrepreneurs use the information given to them by their bookkeeping company in order to make financial decisions throughout their year, hiring an inexperienced bookkeeper can cause them to have incorrect financial statements in their business which can cause them to make poor financial decisions.
By familiarizing themselves with basic bookkeeping knowledge, business owners can help themselves hire the best Edmonton bookkeeping company they can, and also increase the communication themselves and their bookkeeper, so that they can understand what their Edmonton bookkeeping company is providing to them so they can use a better in their business. Entrepreneurs need to know what accrual accounting is. It is when the time between when an entrepreneur has provided the service and when they get paid for it is different. Since most businesses use accrual accounting, it is important that entrepreneurs know what it is. The reason is important to know, is because there is a higher chance of error with accrual accounting, because of the difference in invoice date and receipt of payment.
In accrual accounting, Edmonton bookkeeping companies need to know the difference between Accounts Receivable and accounts payable. Accounts Receivable is the term that is referring to the amount of money that the entrepreneur is owed. They have already provided the product or service and invoiced but have not gotten paid yet. Accounts payable on the other hand is the amount that the entrepreneur owes. They receive products or services and in an invoice but they have not paid it yet.
Entrepreneurs also need to know what a bank reconciliation is. There Edmonton bookkeeping company should be providing them a bank reconciliation at least once a month, and it is good practice to get into doing a bank reconciliation before they make any financial decisions in their business such as paying their staff or disbursing payments. What a bank reconciliation is, is matching the transactions that a business owner has made against the transactions that the bank has recognized. It is very important to do this because the amount of money that shows in the bank statement is not necessarily the amount of money that an entrepreneur has to use. The bank reconciliation will take into account all the transactions that have happened but are not showing up in the bank account yet. An entrepreneur should be looking at their bank reconciliation to understand how much money they have in their business to use instead of looking at their bank statement which shows how much money is in their bank but does not take into consideration any transactions that are pending.