Frequently Asked Questions about Bookkeeping
Answers to common questions regarding bookkeeping.
What does a bookkeeper do?
A bookkeeper records and organizes financial transactions such as sales, purchases, receipts, and payments. They ensure your books are accurate and up to date.
Why is accurate bookkeeping important?
Accurate books help you track cash flow, prepare for taxes, make informed decisions, and ensure compliance with financial regulations.
Can I do my own bookkeeping?
Yes, but many businesses find it more efficient and reliable to hire a professional. Mistakes in bookkeeping can lead to costly errors come tax time.
How often should I update my books?
Ideally, bookkeeping should be done on a weekly or monthly basis. For high-transaction businesses or those seeking real-time insights, daily updates may be beneficial.
What documents should I keep for bookkeeping?
Keep records of all invoices, receipts, bank statements, payroll records, loan documents, and any other financial transactions. Digital or scanned versions are typically acceptable.
How can bookkeeping help me with taxes?
Accurate bookkeeping ensures you’re reporting the right income and claiming all eligible deductions. It also makes year-end tax filing faster and easier—and reduces your risk of an audit.
When should my startup start bookkeeping?
Immediately. Even if you’re pre-revenue, tracking expenses and investments is crucial. Clean financial records help with budgeting, tax prep, and pitching to investors.
How does bookkeeping tie into fundraising or investor reporting?
Investors will want to see reliable financial data. Proper bookkeeping ensures your financial statements are credible and ready for due diligence.
Do I need to track reimbursable expenses separately?
Yes. Reimbursable expenses (travel, supplies, founder contributions, etc…) should be clearly recorded and categorized so they don’t skew your financial reports.
How do I scale my bookkeeping as my company grows?
Consider moving from DIY or basic software to a dedicated finance team or outsourced bookkeeping service. Implementing more robust tools like NetSuite or Sage may also help as transaction volume increases.
Should I integrate my bookkeeping with other systems (like payroll, CRM, or inventory)?
Yes. Integration streamlines operations and reduces manual entry. For example, syncing payroll with bookkeeping software ensures accurate employee expense tracking.
What financial reports should I be reviewing regularly?
At a minimum:
Profit & Loss Statement
Balance Sheet
Cash Flow Statement
Accounts Receivable & Payable Reports
Reviewing these monthly or quarterly supports informed decision-making.
How do I ensure compliance with tax laws and financial regulations?
Work with a bookkeeper or accountant who stays up to date on local, state, and federal requirements. Periodic financial audits (internal or external) are also recommended as your business grows.
What are the advantages of outsourced bookkeeping?
Saves time and reduces errors
Offers access to expert knowledge
Scales with your business
Often more cost-effective than hiring full-time staff
Our Bookkeeping services can help keep your business’ financial records accurate and up to date.
