Often times when discussing Bookkeeping with a new client it can be confused with accounting. In simple terms Bookkeeping is only the reporting of information for both business use and also for the IRS. Accounting on the other hand will bring in to play the analyzing of this information in order to make better business decisions. For this reason employing a Bookkeeping service with a backgroud in accounting can be a great way to be the best services for your money.
Maintaining proper Bookkeeping is a necessary part of running a good business. Having financial information for your small business at your finger tips is important in order to make many of your daily decisions. Having the added support of accounting services will also help you dissect this data that is placed in front of you. It is important to note that there are different ways of handling the accounting for your business and choosing really comes down to your type of business. The two most commons forms of accounting are FIFO and LIFO. FIFO stands for first in first out and means that your invoices will be paid by from the first to be received to the last. LIFO on the other hand stands for last in first out and this will make sure the most recent invoices are being paid first. Proper accounting to back up your Bookkeeping needs will help you monitor important things like revenue flow as well as expenses. If you cannot find out what the balance in your business checking account is from your Bookkeeping it may be time to upgrade. Information like this can help you make very big decisions every day regardless of whether you are just starting out or already bringing in a healthy amount of revenue.
If you are not sure of the difference between Bookkeeping and accounting it may work best to have a tax expert on your side that handles both. This can allow you to plan for the future while having all the information you need at your finger tips.