FAQ
[FREQUENTLY ASKED QUESTIONS]

• What is bookkeeping, and why is it important? Bookkeeping involves tracking all money flowing into and out of a business, providing clarity and control over income, expenses, and overall financial health. Accurate records are essential for informed decision-making, effective planning, and ensuring compliance with tax regulations.

• How often should I update my books? Ideally, books should be updated on a weekly or monthly basis to maintain accuracy, enable timely financial decisions, and ensure clean reporting during tax season.

• What’s the difference between cash and accrual accounting? Cash accounting records transactions when money is received or paid, while accrual accounting records them when they are earned or incurred, regardless of cash movement. Accrual provides a more accurate long-term financial picture, though many small businesses start with cash accounting.

• Do I need a separate business bank account? Yes, keeping personal and business finances separate is crucial for accurate financial reporting, simplifying bookkeeping, and maintaining clear records.

• How do I categorize expenses correctly? Establishing a tailored chart of accounts with consistent categories—such as Office Supplies, Utilities, Marketing, and Travel—ensures accurate financial statements and reflects the true financial health of the business.

• What are the key financial statements I should understand? The Income Statement shows profitability over time, the Balance Sheet provides a snapshot of assets, liabilities, and equity, and the Cash Flow Statement tracks cash inflows and outflows, all of which are vital for assessing financial health.

• How can I ensure my records are audit-ready? Maintaining organized records, keeping receipts and invoices, reconciling accounts regularly, and avoiding the mixing of personal and business finances are key practices to stay audit-ready.

• Should I use accounting software? Yes, tools like QuickBooks Online or Xero, reduce errors, and provide real-time financial insights, making them far more efficient than spreadsheets.

• When should I consider hiring a bookkeeper? If bookkeeping consumes too much time, becomes complex, or if records are disorganized, hiring a professional can ensure accuracy, compliance, and free up time to focus on business growth.

• Do I need a bookkeeper if I have a CPA? Yes, these roles are distinct: a bookkeeper manages day-to-day financial records, while a CPA focuses on tax strategy, filings, and financial advice. Many businesses benefit from working with both.

• How does Virtual Bookkeeping work? A virtual bookkeeper works remotely, managing a business's finances online using cloud-based software (like QuickBooks Online, Xero) to track transactions, categorize expenses, reconcile accounts, and generate reports, communicating with clients via video, email, or phone instead of in-person meetings. They offer the same core services as traditional bookkeepers (AP/AR, invoicing, reporting) but with greater flexibility and lower overhead by leveraging digital tools to securely access client data from anywhere, keeping books current in real-time. 

• How will I access my Financial Data? Companies access QuickBooks Online (QBO) or Xero data via a web browser or mobile app using unique logins, allowing real-time, anytime access from anywhere with the internet, securing data in the cloud, and enabling easy collaboration with team members and bookkeepers/accountants through role-based permissions and automatic bank syncs. 

• What is the “cloud” and is my data safe? The "cloud" is a vast network of remote servers (think huge data centers) storing your digital stuff (files, photos, apps) online, accessible via the internet, not just your device. Your data can be very safe, often safer than on a home computer due to provider security (encryption, firewalls, expert teams, redundancy), but it's a shared responsibility: providers secure the infrastructure, you secure your access (strong passwords, 2FA). 

• How does AI (Artificial Intelligence) fit into the bookkeeping & accounting process? AI is a powerful tool transforming bookkeeping by automating repetitive tasks like data entry, categorizing expenses, and reconciling accounts, which boosts efficiency, reduces errors, and frees professionals for strategic analysis, while also providing advanced fraud detection and predictive insights for better financial management. 

• Can I just let AI (Artificial Intelligence) handle all of my bookkeeping tasks? Although AI is a powerful tool that can be utilized to automate tasks, critical oversight is still necessary to ensure accuracy and compliance.

• I’m just starting my business, I don’t need all of those services, it sounds expensive, how can you help me? I understand. I offer free consultations and tailor my services directly to your current needs and situation. Let’s schedule a time to discuss your business and see how I can help you.

• What if I sign up and then I change my mind? My services can be cancelled at any time, in writing. No advance notice needed. 

• What VALUE will I receive as your client? As my client, you will receive exceptional service and communication. You will have clear and accurate financial data, in a timely manner, at your fingertips. You will have a partner to meet you exactly where you stand with your bookkeeping wants and needs.

• What industries do you provide service for? Any small to medium size business, I will consider partnering with. Let’s talk about your business and discover how I can help you and your business thrive!

• Do you carry Errors & Omissions Professional Liability Insurance? Yes.

 

I have a small business, why do I need a Bookkeeper? 

A small business needs a bookkeeper to maintain accurate and organized financial records, which are essential for making informed business decisions. Bookkeepers handle daily financial activities such as recording sales, purchases, expenses, managing payroll, processing invoices, and reconciling bank statements to ensure internal records match actual transactions. This accurate record-keeping provides a clear picture of the business’s financial health, enabling owners to assess profitability, track income and expenses, and identify areas for improvement.

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Having a bookkeeper helps prevent cash flow problems, which are a leading cause of small business failure—82% of small businesses fail due to poor cash flow management. By monitoring cash flow through regular statements, bookkeepers help businesses avoid overspending and ensure sufficient funds are available for emergencies or growth. They also support strategic planning by providing data for budgeting, forecasting future expenses, and setting financial goals based on historical performance.

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Bookkeepers play a crucial role in tax compliance and preparation. They ensure all financial records are accurate and well-documented, reducing the risk of errors, penalties, or audits by tax authorities like the IRS. Proper records allow businesses to claim all eligible tax deductions and credits, such as business meals or charitable contributions, which are backed by receipts and detailed entries. This preparation makes tax season less stressful and more efficient, especially when filing complex returns.

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Additionally, well-maintained books are vital when seeking financing or investment. Lenders and investors rely on financial statements like income statements, balance sheets, and cash flow statements to evaluate a business’s creditworthiness and value. A bookkeeper ensures these reports are accurate and ready for presentation, increasing the chances of securing loans or attracting investors.

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Bookkeeping also supports long-term business growth by enabling performance tracking through key performance indicators (KPIs) such as revenue, profit margin, and growth rate. It allows for data-driven decisions, such as hiring new staff, investing in equipment, or expanding services, based on reliable financial insights. For businesses with complex operations or multiple transactions, a bookkeeper helps manage this complexity and ensures compliance with accounting standards like GAAP.

 

In summary, a bookkeeper is essential for maintaining financial accuracy, supporting strategic decisions, ensuring tax compliance, improving cash flow, and facilitating growth—making them a critical partner in the success of all small to medium sized businesses. Let’s chat today about how I can help you and your business!

 

Can I just do the bookkeeping and file my taxes for my business, myself? 

Absolutely, you can manage your own business bookkeeping tasks. To ensure accuracy and compliance, small and medium sized business owners are encouraged to educate themselves on basic bookkeeping principles, including how to record transactions, manage and reconcile accounts receivable and payable, and reconcile bank statements. However, you should have your books regularly reviewed by a CPA and utilize their expertise for oversight when it comes to filing your taxes. 

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If you want or need help getting your business set up in a system like Quickbooks Online, I would love to assist you and your staff. Helping to ensure everything is set up properly and is user friendly. Available for initial training and/or any additional assistance. 

 

How does outsourcing a bookkeeper help my small business make more money? 

Outsourcing bookkeeping helps small businesses make more money by reducing costs, improving financial accuracy, and freeing up time for strategic growth activities. By eliminating the need for full-time salaries, benefits, and overhead expenses associated with in-house staff, businesses can save 40% to 60% on overall financial management costs. This cost reduction directly increases net profit margins. Additionally, outsourced bookkeepers provide detailed financial reports and real-time insights that enable better decision-making, such as identifying profitable areas, adjusting pricing strategies, and minimizing losses. These improvements in financial management lead to more efficient operations and increased profitability.

• Outsourcing reduces operational costs by eliminating expenses related to hiring, training, office space, and accounting software, allowing businesses to reinvest savings into revenue-generating activities like hiring more staff or expanding services.

• Access to expert bookkeepers ensures accurate financial records and compliance with tax laws, reducing the risk of costly penalties and errors that can erode profits.

• Detailed financial reporting and real-time data allow business owners to identify trends, optimize cash flow, and make informed decisions that directly impact revenue and profitability.

• By freeing up the owner’s time from time-consuming bookkeeping tasks, outsourcing enables a greater focus on core business activities such as marketing, customer service, and business development, which drive growth.

• Scalable services allow businesses to adjust support based on workload, ensuring they only pay for necessary services, which is especially beneficial during fluctuating business cycles.

 

If you're ready to be in control of your businesses' finances, to be able to make smart financial decisions based on accurate and timely financial data, it may be time to call on a bookkeeping professional to be the partner that you and your business can trust.