They say that a small leak can sink a ship, do you know what is better than fixing the leak…? Making sure that there are none! That is what Bookkeeping is all about, it is the first step of financial management. Bookkeeping can be described more as an on-going task, than as a single activity. One unique aspect of bookkeeping is that it is not only perpetual but can get elaborate and monotonous at the same time. This is why it can be one of the few things seriously concerning you when your business has started trending upwards.
I. Reading between figures!
Poor cash-flow, delayed payments, unorganized working capital, and the list can go on. No matter how well prepared your business plan is, stumbling blocks always show up in new forms. To understand what your business is trying to communicate to you in terms of its financial health, you must be able to accurately interpret your financial reports.
While doing so, most of us forget the basics and wonder why the specifics don’t work.
1. Review the figures:
The most important prerequisite to interpret your company’s financial health is to have accurate financial reports readily available on a regular basis. While it is crucial to have monthly, quarterly and annual reports prepared in a regular and timely manner, only if effective bookkeeping is done in a proper chronological manner it can ensure the regular financial reporting of a company.
2. Thinking reflective:
A simple look into the regularly submitted financial reports is not going to give you all the answers, it is important to think reflectively. Commonly known as the “Iceberg concept”: there are vital aspects of your company’s financial health that do not meet your eye through your final financial reports, these can be identified only during the process of bookkeeping.
3. Significance of good Bookkeeping:
Bookkeeping can become a cumbersome process when your business grows, but at the same time, it cannot be neglected as a daily chore. To carry out bookkeeping as an activity from end-to-end in a systematic manner demands immense detailing. But to utilize it as an analytical tool requires critical financial interpretation also. We, at Diligen, are experts at both! To review and analyze the bookkeeping, compare and interpret the representation of day-to-day transactions of your business in your financial reports and identify the corrective measures to be implemented for improvement.
II. How small changes can go a long way…
When it comes to financial management, it is always the small changes that can bring big results over the long term. Just like how bookkeeping when done effectively and regularly is an efficient tool to good finances, small decisions like opting for outsourced resources at Diligen can prove to be your tool to good management.
1. Why outsource?
As your business begins to grow in a scalable manner, you will watch yourself almost sleep-walking through two basic business rules: budgeting your expenses and cost-cutting. It is normal for you to start viewing every aspect of your business from a budgeting and cost-cutting point of view at one point. During such a time, outsourcing can turn out to be the golden solution for you.
2. How does it help, in your reports:
The cost of hiring, training, rewarding, and offering long-term perks to a full-time employee is saved. Time spent in training followed up by monitoring employee activity is saved. This also allows you to focus the role of your in-house resources towards improvement in business processes. It is very simple to quantify the effect of any changes you bring to your business decisions. There is a lot more than what you can see in numbers.
3. How does it help, beyond numbers:
Are you sure that the bookkeeper you had hired when you initially started has the skill-set to manage the finance of your business which is rapidly growing now? If not, do you have the time or additional resources in-house to intensively train them? How confident are you in your decision to employ a full-time bookkeeper who can single-handedly carry out all the detailed financial operations of your business for the long-term with complete integrity? If not, have you thought about how often you can come across a long-term dependable resource with the right skills? Too many questions in mind? The answer can be as simple as outsourcing to us, at Diligen. The freedom to check the quality of offered services through references and to choose the right person according to your business needs is a given while you choose us. When working with us, you can be sure that the work is done is maintained with high confidentiality.
III. What to look out for, how to make most of this new resource?
Developing new business strategies, innovating the existing ideas, motivating your team, juggling in-between multiple financial terms and reports? Make that one decision to outsource your book-keeping to Diligen and stop worrying!
1. Journal Entry:
It all starts here. Journal entries are nothing but the recording of all the transactions, as on date. It is very important to maintain this in an orderly and organized manner from time to time, as anything that goes wrong here can affect the complete accounting process. Feel confident about this as we are here to take care of it… right from Step 1.
2. Accounts Receivables:
The money your clients owe to you forms part of this element of accounting. Being one of the most basic aspects of your business accounts, we will present this at every stage till the final balance sheets as this can be a deciding indicator for various business decisions.
3. Bank Reconciliation:
There is a second person who is as involved in your finances as you are, and that is your banker. And it is important to make sure there are no differences between your records. This is we will prepare a bank reconciliation statement to identify differences between your bank records and your books of accounts. Although it is not mandatory to prepare this statement of reconciliation every day, it can act as a method to oversee any errors made at the journal entry-level. So, count us as the third person who takes equal concern for your finances!
4. Assets or equipment ledgers:
Any asset or equipment present part of your business operations is given an asset/equipment ledger. Costs related to the repairs, maintenance, wear, and tear are recorded and the value of these assets are ascertained.
5. Day to day bookkeeping and accounting:
Regularly following the cash-flow, managing cheques, and payments, processing invoices, maintaining day-to-day transactions, and accounting as on date… we will ensure every step of it to avoid delayed reporting.
6. Preparation of all payroll-related tax returns:
Filing for payroll tax returns and quarterly report preparation within deadlines are done by us.
Right from virtual accounting, quarterly reconciliations, general ledgers, expenses ledgers, income reports, to cash flow statements, financial budgeting and forecasting, tax filings and consultation, and even document storage. Getting these done on time with Diligen means you can finally stop looking up old records and updating reports during the 11th hour of your yearly audit!