There are almost 700,000 bookkeepers in the United States. Compared to the number of businesses in the US, this number seems low. Why is it that more companies don’t use monthly bookkeeping services?
Probably because most don’t know how to make the most of them and don’t view them as the investment they are. With monthly bookkeeping, businesses can have better financials and tax planning. Companies can even see cost savings and more accurate recordkeeping.
Interested in learning more? Keep reading to learn about how to make the most out of your monthly bookkeeping package.
What Are Monthly Bookkeeping Packages?
It is difficult to manage your finances without a monthly bookkeeping package. In the beginning, you may not be able to afford one but it is worth the investment in the long run.
A monthly package will help you stay on top of your finances and avoid any big financial mistakes that could cost you a lot of money in the future. It also helps with tax preparation and other important tasks that require accounting skills.
The following tasks are generally involved in bookkeeping services:
- Making payments
- Collecting payments
- Cash flow
Monthly bookkeeping packages can help you make more money, save more money, and track the progress of your business. They offer some of the best benefits that come with having an accountant on retainer.
Bookkeeping Rates Per Month
The cost of monthly bookkeeping varies from one bookkeeping company to another. One company may charge for the number of hours their employees work, while another may charge by the number of invoices they generate. Some companies charge a fixed monthly fee, while others charge by the hour or by the project.
For example, at Klean Books, our bookkeeping cost per month ranges from $185 to $919 per month. The packages offer a variety of features so you can choose the best for your company.
Monthly Bookkeeping Best Practices
To make the most of your package, you need to have a few best practices in place. These will ensure you have good habits when it comes to your bookkeeping so your service provider has everything they need to do their jobs. Best practices include:
Create a Monthly Bookkeeping Checklist
One of the most important parts of a business is its bookkeeping. Bookkeepers are responsible for making sure that your business’s finances are in order and that you’re not committing any financial crimes.
If you’re a business owner, you should use a monthly bookkeeping checklist to make sure that your bookkeeper has all the information they need. It will make it easier for them to do their job properly.
A monthly bookkeeping checklist is essential for any business owner, but it’s also one of the most neglected tasks in running a company. It’s important to take the time to make sure you’ve done everything correctly so your bookkeeper can do their job properly and stay on top of things.
Using Cloud-Based Software
Cloud-based bookkeeping software is the best option for businesses who want to keep their books in an organized and efficient way. It’s also great to use when hiring a bookkeeper because everyone can see information in real-time.
This software is used by small and medium-sized businesses, freelancers, and entrepreneurs. It is also a great option for people who are just starting as they don’t need to worry about having a lot of knowledge on how to use it.
There are many benefits of using cloud-based bookkeeping software, such as the following:
- It is easy to use since it does not require any technical knowledge or training
- It is affordable because there are no upfront costs involved
- The data can be accessed from anywhere so you can work from home or remotely with ease
- You will have a better overview of your finances
Choose an Accounting Method
Bookkeeping is the process of recording financial transactions and information about them. It is usually done by accountants or bookkeepers.
Accounting methods are a way to keep track of your company’s finances systematically. They help you to know how much money you have, what you owe, and what you can spend on your business.
There are a few accounting methods that businesses can choose from. These include cash-based accounting, accrual-based accounting, and hybrid accounting.
Cash accounting is when a company records all of its transactions in cash. This is the easiest method to understand because it is based on simple math and doesn’t require much data input. It also requires less time to do because it’s easy to record transactions manually.
Accrual accounting is when a company records all transactions of what they have done rather than what they have received or spent yet. This method has some more complex formulas to calculate and data to input before it can be used.
It also requires more time because of the calculations needed so that financial data can be presented.
The primary difference between cash accounting and accrual accounting is the approach to recording transactions. A hybrid approach uses a little bit of both methods.
Ensure Separate Accounts for Business and Personal Expenses
When it comes to bookkeeping services, one of the most common mistakes that people make is not separating their personal and business expenses. This is a huge mistake because it can cause a lot of problems for your company if you don’t have an account for each purpose.
The importance of having a business account is that it will allow you to keep track of all your expenses in one place. This will help you to stay on top of your finances and avoid any financial mishaps.
Plan for Taxes
Companies using bookkeeping services should consider the benefits of using them. A business can benefit from bookkeeping services by receiving guidance on how to minimize taxes and save money. You need to understand what is deductible and what is not.
Bookkeepers help you determine which deductions are available and which ones aren’t.
Maintain Daily Records
Daily accounting records are important for businesses because it is a good practice to keep them. This is because it helps the business to stay organized and on track.
Daily accounting records also help in increasing the productivity of the business. It will allow the business to know where they stand financially as well as what their expenses are.
When working with a bookkeeper, daily recordkeeping helps them with the company’s financials at any given time. It also prevents them from having to search for information.
Reconcile Accounts Monthly
Businesses should reconcile their accounts monthly with a bookkeeper. Reconciliation is important to ensure that the bookkeeper has not made any mistakes in the process.
Reconciling accounts monthly is important for many reasons. It helps to prevent errors and it makes sure that your business is running smoothly and efficiently. It also helps to keep your company on track and to avoid any issues that might arise from doing this less often.
Block Out Time Weekly to Review Books
You need to review your business’s financials each week. This is because they are the foundation of your business and if you don’t have a good handle on them, it could lead to a lot of troubles.
It will help you stay aware of your financial situation and make sure that you’re not spending more than what you should be. Additional reasons to review your books weekly include:
- It will help you identify areas for improvement and changes in your business
- It will help you make better decisions about how to allocate resources in your company
- It will help you stay on top of tax filing deadlines
Organize Your Documents and Accounts
When you start a business, you will need to organize accounts and documents for your bookkeeper. You should know that it is important to have this done to avoid any losses or issues down the line.
To be able to find your documents easily, organize them in a way that makes sense for you and your business. For example, if you sell products online, then it would make sense for you to organize all of your documents by product categories.
Automate What You Can
The benefits of automation are many, but the main one is that it can reduce your company’s costs. With an automated system, you can reduce the time spent on repetitive and administrative tasks. It allows your bookkeeper to focus on more important activities.
Create a Routine for Bookkeeping
It is important to have a financial routine with a bookkeeper. This is because it helps you stay on track with your finances. It also reduces the work and the risk of overwhelm.
It will help you organize your time and make sure that everything is done in the right way. A routine will also help prevent mistakes because it will make sure that you complete everything in the right order. It will also make sure that all of your receipts are filed away properly.
When it comes to working with a bookkeeper, you must agree on the financial routine beforehand. You should also know what information you will share and what will be kept private.
Generate Regular Reports
Financial reports are important for your business. These reports help you to understand the financial status of your company and plan accordingly. It also helps you to manage your company’s cash flow and keep track of expenses.
When working with a bookkeeper, you should generate regular financial reports. You use these reports as a benchmark for how well the bookkeeping services are doing.
Set Alerts for Deadlines
Financial deadlines are important for any business. There are several reasons why you should not miss them, and one of them is that it can harm your business.
If you want to avoid this, then set alerts for important deadlines so that you don’t miss them.
Build an Audit Trail
Bookkeeping is an important part of business operations because it helps businesses remain audit-ready. Bookkeepers keep track of all the financial transactions in a company and ensure that they are not being misused.
Audit trails are important for businesses to stay compliant with the law. Without it, businesses may not have proof of all their transactions. This may lead to fines or penalties for violating regulations.
An audit trail is a time-stamped record of every financial transaction made in a company’s books. This includes every purchase, sale, transfer, deposit, and withdrawal from the company’s accounts and assets.
Record Cash Payments
Cash is one of the most important things to track for a business. It is important to document cash payments for your bookkeeper. This will help your bookkeeper in keeping accurate records, reporting on expenses and taxes, and making sure you don’t lose money.
Cash payments are often the most difficult thing to track for a business because they aren’t as easy to document as electronic transactions. There are many reasons why a business should keep track of its cash payments. Some reasons include:
- Make sure that money is not being lost or stolen
- Make sure that money is being spent wisely and efficiently
- Ensure tax compliance with the IRS
- Document transactions
Hire a Bookkeeper Today
This article covered what monthly bookkeeping services are. It also educated you on how businesses can make the most of these services.
Do you need a bookkeeper? At Klean Books, we have years of expertise in bookkeeping, payroll, and tax planning. Our experts can manage your business’s financials while helping to save on costs.
Interested in learning more? Book a free consultation today to discuss how we can help your organization.