Bookkeeping is an integral function of every company. They all rely on efficient bookkeeping for financial management, be it a small shop or a multinational firm. Bookkeeping involves identifying, recording, and classifying financial transactions and entering them into the books of accounts. They manage invoice processing, reconciliation, accounts payable, accounts receivable process, etc. Since bookkeepers play such a significant role in a firm's functioning, firms need to employ qualified and skilled bookkeepers. It is essential because hiring inefficient bookkeepers can cause issues like:
- Errors like an omission, commission, principle, etc., and not reconciling them properly
- Unprepared books at the time of financial statement preparation and tax filing
- Inaccurate tax calculations cause penalties
- Delays in receivables collection and payments to vendors
- Significant financial losses
- Unable to track expenses and false reports
The above-listed issues show how inefficient bookkeeping can lead to severe problems for a firm. Let us understand the differences between an excellent and inefficient bookkeeper:
- Accessible vs. non-accessible: An excellent financial reporting services provider will be accessible and available anytime the business needs them. Firms can communicate their concerns and get an adequate response on time. On the other hand, if a service provider is constantly out of reach or dodging your calls and messages, it may not be a good sign.
A good bookkeeper will set communication and acceptable timelines for contact to ensure seamless transactions between them.
- Timeliness Vs. delays: If you find your bookkeeper continuously being behind on the books, it is a sign of a significant problem. Every business requires adequate bookkeeping to catch up with the accounts receivable process, cash flow, and financial management. Therefore, respecting deadlines is a must-have trait in an ideal bookkeeper. A good bookkeeper will ensure timely and reliable work, so their clients do not get into trouble.
- Competent Vs. panicked: The tell-tale sign of an inefficient bookkeeper is becoming frazzled when tax season comes. A professionally competent bookkeeper must stay relaxed and calm in every state and use their resources, expertise, and qualification to handle any issues. Tax filing must be daunting for a businessman but not a bookkeeper.
- Honesty Vs. blame-game: An ideal bookkeeper reflects transparency and truthfulness. They offer an honest view of your financial state. Also, they ensure keeping your information confidential and preventing misuse. If any problem arises, they will take care of it. On the other hand, an inefficient bookkeeper might not be blatantly honest and play the blame game until the matter settles. It is not a professional move.
