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Every business or brand needs to find a way to manage their finances efficiently so as to avoid any unnecessary expenditures, to save as much as possible, and to allocate funds where needed. In order to be able to do this, they seem to systematically record all their financial transactions. This is where bookkeeping and a bookkeeper come in. Bookkeeping refers to the process of systematically recording every single one of the company’s financial transactions. Bookkeepers must organize and record all sales and purchases, receipts, discounts, payments, etc. by either individual in the company or by the company as a whole.
Bookkeepers are responsible for doing this on a fairly regular basis, and they make records in what is commonly known as day books, and it is on the basis of these very records that accountants can, in the future prepare reports on the financial status of the company, and make suggestions about how it can be improved. Bookkeeping is a part of accounting, but the two of them should not be considered the same; an accountant can be a bookkeeper but not the other way around.
The United Arab Emirates is home to hundreds and thousands of businesses, small and big. Given the fact that the country’s economy is flourishing, business owners earn large profits and are also able to expand further. There are a number of factors that go into determining the success of a business, such as marketing and advertising, human resources, amongst others, and one of the most important ones is accounting and how the finances are managed. Every company makes sure to hire the best team when it comes to the accounts department, but there are a few businesses, mostly newer ones, that find it difficult to pay full-time accountants and choose to hire bookkeeping services instead, as a means of saving up on some money.
Why is Bookkeeping important?
Without the help of bookkeeping services, especially in the case of small businesses, they would not have the means to analyze their financial situation and would not be able to make sound decisions in the future.
How to Keep Your Bookkeeping Costs Low
Bookkeeping is an absolutely essential service when it comes to businesses, especially the newer and smaller ones since it helps them keep track of their expenses, allocate funds where needed, avoid making unnecessary payments, pay taxes on time, etc. Without having someone keep a proper record of every single financial transaction pertaining to the company, it could go into a loss in no time. However, even though it is cheaper to hire bookkeeping services for this purpose instead of hiring a full-time accountant, it is still expensive. So, here are some ways in which you can cut down on your bookkeeping costs while still taking complete advantage of the service:
- Using an Online Service: While it is always a good idea to have people do the work; to have bookkeepers personally organize and record all of your company’s financial transactions, since it allows you to discuss matters with the bookkeeper, it is a lot cheaper to hire an online service for the same. It would be a professional bookkeeper doing the work, but simply online. You would not see the person but can contact them in case of any queries, and this way, you would end up saving a lot of money, without having to worry about any loss of quality work.
- Determine How Much Work You Would Need to Get Done: A very easy way of cutting down on bookkeeping costs is actually to decide how often you need their services and how much work they need to do. Depending on how often you would need this service, you would need to hire professionals, so if you don’t need them to do the work every day, or need them to do it, say, once a month, do not hire them for a long period of time. Pick a service that suits your timetable so that you don’t end up paying for more than the amount of work done.
- Keep Your Data or Transaction Information Properly Organised: There are services that charge on the basis of the amount of time taken to complete the work and the effort involved as well. A way to avoid paying extra to bookkeepers is to ensure that all your company’s financial information such as receipts, payments, discounts, sales, and purchases, etc. are all categorized accordingly and are not jumbled up since that would save the bookkeeper time when recording them. You can always think about having a designated employee from the finance department do this work since they would also understand what everything is.
- Make Sure to Keep Your Systems Updated: When you hire a professional bookkeeper to produce and maintain a record of your company’s finances, it is advisable that all your computer systems not only work but are equipped with the latest technology or are updated so that the bookkeeper would find no difficulty in either retrieving all the necessary information or entering data or reports in to save for later. This would reduce the amount of effort as well as the time they would need to put into the work and would then charge less.
- Avoid Spending Money Unnecessarily: One of the most important reasons why you would be looking for means to cut down on bookkeeping costs is because you want to save money and use it where it is needed more urgently. One of the ways in which you can avoid having to worry about spending money on bookkeeping services is by actually cutting down on your overall costs. There are multiple ways in which your company would be spending money, which either goes unnoticed or is actually spending money where it wasn’t needed. This, of course, depletes your financial resources so, find ways to improve employee productivity and efficiency so that you can avoid money from being spent unnecessarily so that you can afford a quality bookkeeping service.
- Segregate Your Personal and Business Transactions: It is quite easy for your business and personal expenses or finances, in general, to get mixed up and for the mix-up to go unnoticed. However, when a bookkeeper attempts to create a systematic record of your company’s finances, it would be time-consuming to separate the two and then create the record, which means you might be charged more. It is always better to not only ensure that your business transactions are organized but the personal and business ones too.
It is absolutely important for your business’ growth that you have someone to professionally record all your financial transactions. The way your company spends in the future or where it decides to allocate funds would depend primarily on its past expenses as well as its revenue. To be able to analyze them, there is a need for an accountant or a bookkeeper that would help in creating crucial records and would be able to advise you on matters of finance. In the event that you do not have a lot of money to spend on bookkeeping services, the above-mentioned points are useful in cutting down on costs, but it is also important to keep in mind that you need to hire experienced professionals so that you will get only the best results.