What Accounting and Bookkeeping Services Does Your Small Business Need?

On the surface, accounting and bookkeeping for your small business can feel like another very important task on a long list of very important tasks. Though it involves daily transactions, most small business owners do their accounting and bookkeeping on a monthly basis. Even so, bookkeeping and accounting can take up precious time for small business owners. From setting up your bookkeeping services and professional accounting services, managing your books can feel overwhelming, especially around tax season.

To keep things simple for our Denver, CO small businesses, we’ve covered the basics of accounting and bookkeeping services for small businesses. Learn what accounting and bookkeeping services your small business needs to help you understand your cash flow, liabilities, profit, growth potential, and more. ‍

What is the Difference Between Bookkeeping and Accounting?

One of our most frequently asked questions is: What is the difference between bookkeeping and accounting? At first glance, the two may seem quite similar, but the differences between both accounting and bookkeeping are major in the world of financial record keeping.

Bookkeeping is all about recording and organizing financial data. On the other hand, accounting is the analysis and interpretation of financial data obtained from bookkeeping. Bookkeeping lives under the accounting umbrella; it’s arguably one of the most important parts of professional accounting services.

In terms of the role of a bookkeeper versus an accountant, accountants are typically used for more advanced tasks and larger organizations. Bookkeepers handle basic accounting needs, but for small business owners who want to hire someone for strategic planning, maintaining compliance, operations management, and risk assessment, then small business accounting services will be needed. Not all bookkeepers are accountants, but all accountants can handle bookkeeping.

‍Now that we’ve uncovered what is the difference between bookkeeping and accounting, let’s explore each concept further from the lens of small business owners.

What is Bookkeeping?

Bookkeeping is the practice of recording your day-to-day transactions. These transactions can include payroll, invoicing, receipts, bills, or daily to monthly business transactions. 

As a small business owner, you can address bookkeeping in one of two ways: you can do it yourself, or you can incorporate resources to help you manage your daily transactions. These resources can be as simple as hiring a bookkeeper or an accountant, or can be as complex as setting up and maintaining an accounting software. Bookkeeping for small businesses differs based on preference. So, we’ve covered typical bookkeeping services (and accounting services further downward) you’ll want to consider utilizing for your small business.

Bookkeeping Services for Small Businesses

Bookkeepers record the daily financial information of a small business, keeping note of expenses, revenue, assets, payroll, and liabilities. They regularly summarize the information they track and record for small business owners to evaluate. Bookkeeping services for small businesses include the following:

1. Separating business finances from personal finances. This ensures small businesses owners can file accurate tax returns and understand their financial wellness.
2. Streamlining tax processes and simplifying business expenses. This quite often saves small businesses in both time and money.
3. Organizing financial records and documents to make it easier for small businesses to refer back and plan ahead.
4. Preventing bookkeeping errors or mistakes early. Small businesses identify these errors within weeks, rather than encountering multiple errors that need addressing during tax season.

Bookkeeping services for small businesses are a must for owners who want to accurately and successfully grow their business. You can either outsource your bookkeeping to an online service, though you’re still in charge of gathering a lot of the information. Or, you can hire a bookkeeper or accountant to manage your books. The latter will save you in time and money in the long run, though be sure you’re selecting bookkeeping services you can trust.

What is Accounting?

While bookkeeping covers the day-to-day finances, accounting takes that information and interprets it for small businesses. Accounting is the process of summarizing financial data and keeping records of that data. It’s a systematic process that breaks down the financial blueprint of an organization. It tells people who run that organization what they need to know about all the financial elements, such as:

• Accurate financial documents, which keeps organizations within the laws or regulations they must follow.
• Financial reports and statements that provide insight into how the organization currently performs.
• Tax returns and assurance that the organization is current on all taxes.
• Guidance on how organizations can maximize their profit potential. This often includes suggestions for cost reduction or revenue enhancement.
• Risk analysis assessments which forecast potential business impacts over time.

Accounting is necessary for businesses of all sizes, including small businesses. It shares with small business owners key financial information and accurate assessments of that information. It helps small businesses make decisions, plan for costs, and measure their current & potential economic performance.

Small Business Accounting Service

Small business professional accounting services include bookkeeping services such as: separating business finances from personal finances; streamlining tax processes; simplifying business expenses; organizing financial records and documents; and preventing bookkeeping errors or mistakes early. In addition to those items, professional accounting services provided for small businesses include:

1. Key advice on business structure to cut down extraneous costs or expenses for a small business.
2. Helping small businesses create efficient, compliant processes. This can apply to things like shipping, receiving, and billing.
3. Issuing invoices to help small business owners ensure they’re paying the right people and they’re getting paid by their customers.
4. Keeping a record of sales to allow small business owners to accurately track and predict their business revenue & profits.
5. Handling and analyzing payroll so that business owners are paying their employees the correct amount  and accurately withholding payroll taxes.
6. Preparing small business tax returns to keep small businesses compliant and current on all taxes.
7. Small business accounting services also include keeping organizations up to date with laws and regulations.
8. Evaluating and providing suggestions for the financial health of a small business. This includes risk analysis and cash flow management.

There are also different types of accountants out there, from Certified Public Accountants (CPAs) to Certified Management Accountants (CMA). You can use online accounting services, though they’re a bit more hands on than hiring a small business accounting service.

As with bookkeeping, hiring an accountant is essential for your small business and its growth, though you have plenty of options to consider before you pick which service or resource to use for managing your finances. Especially now that you understand what is the difference between bookkeeping and accounting alongside what services bookkeepers and accountants offer. Now, you can select a small business accounting service that’ll work for your business-management style.

4Corner Bookkeeping Services & Accounting Services in Denver, CO

We’ve answered quite a few of our most popular frequently asked questions in this article, like what is the difference between bookkeeping and accounting, what accounting services do small businesses need, and why hire a bookkeeper for your small business. If you have any additional questions on bookkeeping services for small business or small business accounting services, feel free to contact us at 4Corner Business Services. You can set up a meeting with Phil Zavala, founder of 4Corner, to get you on the right track.

4Corner Business Services is Denver’s answer to both accounting and bookkeeping services for small businesses. We offer expert professional accounting services to small and large businesses across the Denver metro area. As an English-Spanish bilingual firm, we offer accessible, accurate, and timely advice for all your business needs. Whether you’re looking for accounting & bookkeeping services, organizational support, or business consulting services, 4Corner is here to help you grow.

We can provide your Denver, CO small business with all the bookkeeping and accounting services you need so you can better understand your business’s finances and maximize your profit potential.