An organization's financials are the strongest foundation for exponential growth and unwavering stability. Any issue or loophole in the financial records or operations can lead to sudden downfall and sometimes complete collapse. In an environment of extensive competition, unstable tax systems, geopolitical tensions, unfair targeting, and fraud, Bookkeepers emerge as the light of stability and transparency. The auditing and bookkeeping industry is massive, proving its importance for organizations and firms, especially SMEs. SMEs can use a bookkeeper as a shield against all odds. Here, we will discuss the role of Bookkeers in fraud detection for SMEs in detail.

What are SMEs?

Small and Medium Enterprises, or SMEs, are the backbone of any country's economy because they contribute to economic growth and employment. They are small and medium-size firms that mainly focus on local markets. One of the biggest objectives of SMEs is to support heavy and large industries by providing raw materials and even finished goods. These enterprises can belong to any industry. The benchmarks to classify them as SMEs are revenue, assets, market cap, number of employees, etc.

Who are Bookkeepers?

A bookkeeper can be both a person and an organization. So, a bookkeeper deals with the financials of an organization. Its main objective is to look, manage, and correct an organization's financials. The main working areas of a bookkeeper are expenses, transactions, credit, debt, cash flow, invoices, revenue, profit, etc. It is also responsible for auditing, which is very important for any organization. They work under primary accountants and ensure the smooth day-to-day operations of a business.

Why Bookkeepers are Needed for Business?

Well, having a bookkeeping team is essential for any type of Enterprise, irrespective of its type and size. Now, large enterprises like MNCs have their own bookkeeping team, and such organizations hire external teams or firms for auditing only. On the other hand, SMEs generally didn't have a massive trained workforce or highly advanced technical infrastructure, which resulted in inefficient and ineffective operations. Now no one can't bear inefficiency, delay, inaccuracy, and impreciseness when it comes to Enterprise's financials. Thus, it's necessary to hire a bookkeeping agency that will provide a team for accounting, bookkeeping, and even auditing, solving all significant problems of SMEs. Excellence offers one of Oman's best accounting and auditing services for every SME.

How do Bookkeepers Work?

A bookkeeper's work is vital to understand their importance. Every bookkeeping firm has a different way of working and, of course, various strategies, but their goals are almost the same. Here is how bookkeepers work.

Monitoring and Recording Every Transaction

The main loopholes lie in financial transactions. This is because multiple transactions occur every day in different formats, and an error in any transaction is enough to disrupt the balance sheet. Bookkeepers maintain a close and continuous watch on every transaction. They also ensure complete transparency in recording the statements so that owners and stakeholders will get a reality check of the company's current financial condition. Every transaction is monitored along with the final daily cash flow statement, ensuring no chances of monetary loss.

Maintaining Strong Internal Policies

It is observed that SMEs have poor and informal internal policies, leading to the involvement of anyone in confidential operations and data. The organization's financials are the most confidential elements, and thus, only higher and more responsible candidates will be involved. Bookkeepers are very strict and professional when it comes to internal policies and confidentiality. They also ensure equal and fair distribution of work with restricted access to data to the individuals.

Technical Infrastructure

The first thing every bookkeeper does is work on the technical infrastructure. Accounting of an SME can't be done using old traditional concepts, systems, and infrastructure. From maintaining highly secure internal connectivity to installing advanced software and performance-oriented systems, bookkeepers rely more on technology, especially when it comes to data protection and transparency. With advanced technical infrastructure, authorities have more control over the employees, and lastly, there are few chances of human error and potential manipulation.

Managing Taxation

As mentioned above, major loopholes lie in transactions, and transactions are mainly manipulated due to taxes. Bookkeepers may look harsh when managing taxation, but they ensure complete dominance when it comes to reputation and strength. However, bookkeepers advise and implement policies and strategies that may help reduce and manage taxes perfectly. Ultimately, their main goal is to protect Enterprises from legal issues and infamy. By utilizing and managing taxes perfectly, they ensure government support in the form of subsidiaries and beneficiary schemes.

Auditing

Even when an SME has a good accounting and bookkeeping team, it is advised to hire a bookkeeping firm that does auditing also. Excellence is among the few firms offering accounting, bookkeeping, and auditing services in Muscat, making it a preferred solution for all types of SMEs. Auditing is basically cross-checking and verifying an organization's reports, balance sheets, and financials. Its main objective is to detect any error or inaccuracy in the data showcased by accounting and bookkeeping teams. Even MNCs and large organizations hire external firms for auditing so that they can evaluate their financials with no bias.

How do bookkeepers prevent Fraud?

After going through the above section, you can easily understand how bookkeepers detect and prevent fraud on a daily basis. Bookkeepers working and functioning are directly linked to fraud detection and prevention. Frauds usually occur in two instances: data manipulation and data riskiness. Let's understand this in detail.

Data Manipulation

Data manipulation simply refers to changing or deletion of data. This can occur in multiple ways. Firstly, organizations show less revenue and profits when getting tax waivers from the government. This leads to legal issues and targeting by external organizations. Secondly, employees can manipulate records and balance sheets by adding, deleting, and changing transactions, which results in financial loss. Lastly, data is misinterpreted or altered knowingly to decrease expenses and reduce liabilities. These are just a few data that can be manipulated at any step and in any way, leading to extreme fraud.

Data Riskiness

Data is very important nowadays, and financial data is a treasure for external entities, competitors, and unsocial elements. Data breaches or supply of importance statements can lead to disastrous financial fraud. It can easily shake the foundation of an organization and can burst the bubble of positive sentiments about the firm in the market. Moreover, one can easily interfere in the internal functioning of the organization, damaging operations, stability, and growth. Now, bookkeepers like Excellence eliminate all chances of fraud, and if they find any discrepancy in the financials of the organization, they work on them quickly. Even if the organization does not hire them for operations, they offer consulting to the firm. From providing essential strategies to implementation guides, Excellence ensures 100% protection against all types of fraud.

Wrapping Up

Bookkeepers have always proved to be a trustworthy companion for every SME in their growth journey. Any disruptions or faults in the finances may block the growth rate of an organization and result in a devastating downfall. Bookkeepers work on the core of the company's financials, and efficient auditing fuels the growth engine with exceptional power. In addition to that, Excellence Audit & Accounting Services - one of the leading audit companies in Oman is waiting for you to cover your organization with financial stability and incredible security.