Bookkeeping is a very general term and has many different definitions kind of like a handyman.  Some handyman can repair everything from HVAC to plumbing and painting, while others really only do smaller jobs like change out locks or fix a garbage disposal.  Bookkeeping is the same way.   Some bookkeeping firms only provide basic bookkeeping entries and reconciliation and others like Finance Pals provide accounting like Accounts Receivable and Accounts Payable as well as Full Charge or Controller functions that help manage cash flow and help set strategy with the management team.

Here is our list of the different types of bookkeeping services and what they are.

Basic Bookkeeping Services – Reconcile Bank Transactions

These are the core activities that all bookkeepers should do.  They involve getting all of the data from your bank or credit card into the accounting software like quickbooks or xero.  Here are the main steps –

1. Enter banking transactions – Most accounting software’s have feeds setup so that all transactions are synced up into the accounting software.  If for some reason the feed breaks or is older than 3 months then you have to import older data.  One key error to look out for after you setup the feed if the accounts first entry is an opening balance then you will need to delete that line and manually import the older data.
2. Classify the transactions – this is the step that populates the bank data into the PL (Profit and Loss) and BS (Balance Sheet).  It takes that google ads spend and classifies it as marketing or google ads depending on how detailed the chart of accounts is.  It will also classify a different google charge for Gmail to be software subscriptions or an account like that.  Good bookkeepers will continually update the chart of accounts so that the financial statements are as meaningful as possible.  It is also worth noting that accounting software’s are getting smarter and can use AI type intelligence to give recommendations based on how you entered transactions in the past.  You can also have the software auto categorize certain transactions using rules.
3. Reconcile the accounts to make sure they are accurate – After all transactions are entered the reconciliation step checks to make sure the balance matches.  So if your bank statement says you have $10K in the bank then this step checks to make sure the accounting software says the same thing.  If it doesn’t then you probably did something wrong and it is researched and fixed until they match.  It is worth noting that there are certain transactions that may not occur in both the statement and software at the same time which is a valid reason for the balance to be different but the reconciliation will show the reason for any differences.

So these are the basic bookkeeping services that all bookkeepers and bookkeeping firms provide.  It is worth noting that a lot of firms only do the basic bookkeeping.  So it can be pretty frustrating for a business owner as they need help with everything from sending invoices to customers to understanding how much cash the business will have at the end of the month.  At Finance Pals we go above and beyond a basic bookkeeping firm and provide everything a small business or startup would need.  This includes Accounting Functions and Full Charge Bookkeeping Services, which basically includes everything up to what a controller would do.  We also provide Fractional CFO and Tax services as we want to help out with all of our finance needs.

Accounting Bookkeeping Services

Accounting Services are the first step up and provide the operational tasks that are needed to run the business.  Fir larger business they may have an AR Accountant and an AP Accountant position.  For a smaller business it is critical they they get a partner that can provide these functions so that the owner is not having to spent their valuable time doing these tasks.

1. Invoicing / AR (Accounts Receivable) – These are the bills that you send your customers so that your company gets paid.  It will show up as revenue on your PL statement.  This is super important to get it done as quickly as possible so that you will get paid sooner.
2. Enter Bills / AP (Accounts Payable) – These are the amounts that you owe your vendors and suppliers.  Most times when they send a bill there are payment terms on when the bill is due.  When you put the bill into the system you can run a report to see what bills are due on which dates.  This is extremely helpful when you compare it to your AR or money coming in due dates to see if you will have enough cash to pay your bills.
3. Run Payroll – This is how you pay your employees.  Sometimes if you have an HR team they can run payroll but for smaller companies that do not have this function it will fall on the owner or bookkeeper.  The tasks can include setting up new staff, checking and approving timesheets and ultimately telling the payroll company how much to pay everyone.
4. Taxes – If you sell physical goods or products then you will have to collect and pay sales taxes.  To pay the sales taxes you have to calculate the amount you owe and submit the forms monthly or quarterly to the correct organization which is usually different counties in each state.  Your accounting software will help with the calculations but you still need someone who completes the paperwork and pays the taxes due.  There are also use taxes for the goods that you buy and  income taxes that you pay the IRS.  CPA firms usually file the income taxes and luckily for us we have CPA’s on staff that can file those forms for you.
5. Fixed assets – These are the larger purchases your company buys like vehicles, machinery, equipment, inventory.  Usually they cost more than $2500.  After they are entered onto the balance sheet then they need to be depreciated to move a certain portion of the expense to the PL each year based on the useful life of the asset.
6. Financial Statements – Once you have all of these things finished then you are ready to create financial statements which include the following –
   1. Profit and Loss (PL) – This shows the Revenue, Cost of Good Sold, Operating Expenses and Profit for the company
   2. Balance Sheet (BS) – This shows the bank account balances and other
   3. Statement of Cash Flows – shows the sources and uses of cash

Controller / Full Charge Bookkeeper

The full range of bookkeeping services is covered by a Full Charge Bookkeeper or Controller.  They handle all aspects of managing the finances for a company including managing a team of accountants as well as seeing the big picture of the how the company is doing.  They are basically a financial consultant for the company to do anything they can to improve the company.  The only people with more skills are fractional CFOs or CFO’s that spend all of their time forecasting and analyzing the company to improve it.  There are also CPA firms and tax consultants that specialize in those functions.  Here are some of the additional tasks covered by Controller’s / Full Charge Bookkeepers –

1. Managing Cash Flow – The Full Charge bookkeeper will check the bank balance before running payroll or paying vendors to make sure the bank balance can support the charges.  They may also forecast out cash flows using AP and AR.
2. Review Financials with Management -Instead of just sending the financials out a Full Charge Bookkeeper or Controller will review the financials with the team to make sure they understand opportunities, risks and trends based on how the last month, quarter or year went.  It takes a lot more knowledge and skill to be able to answer questions about how the company is doing and to provide intelligent insights to improve the business
3. Manage other resources – These key members of the team help supervise and direct accounting, bookkeepers and other staff to make sure the financials are completed on time and are accurate.

If you need help or have questions, Finance Pals would love to give you some free tips and advice over a 30 minute phone call. We love all things Finance, whether it’s bookkeeping, accounting, FP&A, fractional CFO responsibilities or taxes and want to share our knowledge with you!

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