Methods for Maintaining Records The process of collecting recording and

Methods for maintaining records the process of

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chart. Methods for Maintaining Records The process of collecting, recording, and maintaining financial data is called bookkeeping. Bookkeeping is often overlooked by many start-ups and small businesses, however, it is essential in the survival and success of any company or business. Bookkeeping paves a platform for strategic accounting and financial decision making. Many business owners mistake bookkeeping and accounting and cannot distinguish between the two. Bookkeeping is considered the recording of daily, weekly, and monthly financial transactions. On the other hand, accounting is considered to be strategic where accountants or business owners interpret the 15
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recorded financial data and make business decisions from those numbers. If these two systems of financial maintenance are not accurate or incorrectly done, the financial picture of the business can be distorted or wrong. This error can lead business owners to make wrong financial business decisions that can lead the company into failure. In this section, the team will go into detail about bookkeeping and accounting. The team will emphasize the importance of bookkeeping and accounting and its effects in business. Once a clear understanding has been communicated to the clients, the team will highlight the advantages and disadvantages of in-house versus external outsourced accounting and bookkeeping. The team has highlighted key takeaways from bookkeeping and accounting below. (Top 6 Reasons Why Bookkeeping is Important to Your Business, n.d.) (5 Reasons Why Bookkeeping is Important for Your Business, 2015) (Top Reasons Why Bookkeeping is Important, 2016) (Edunote, 2018) Importance of Bookkeeping Makes Filing Tax Obligations Easier Accurate Financial Reports Required by Law Makes IRS Audits Easier & Lesser Penalties Importance of Accounting Important for management and owners to make business decisions Financial Planning Helps Businesses Get Loans 16
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Managing Cash Flow The team has highlighted the importance of proper bookkeeping and accounting to the client. It is crucial that Classic Gentleman takes bookkeeping and accounting seriously. It will relieve stress during tax season, help the business grow, and give management an accurate picture of the company’s financial health. The consulting team will now discuss the advantages and disadvantages of in-house bookkeeping and outsourced bookkeeping. (King, S., n.d.) In-House Bookkeeping Advantages Disadvantages Can Be Self-Taught Easier to Manage, Proximity Hire Qualified Bookkeepers Risk of Fraud Outsourced Bookkeeping Advantages Disadvantages Expertise Reduces Risk of Fraud Expensive for Small Businesses Less Control After analyzing the disadvantages and advantages of in-house bookkeeping and outsourced bookkeeping, the team recommends that Classic Gentleman uses in-house bookkeeping. Outsourced bookkeeping is often very expensive for small businesses to do.
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  • Spring '17
  • Trisha Miller
  • Accounting software, Comparison of accounting software, Classic Gentleman

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