If you are a small business owner and wonder what a bookkeeper does for your business, the answer is simple yet complex. A bookkeeper keeps records of transactions and maintains financial reports. However, if you are a large-scale company with many branches, there will arise a point when you need an accountant. And at this point, the responsibilities of the bookkeeper become complex. The words “bookkeeper” and “accountant” are often used interchangeably, and the duties often transient into each other. Understanding the difference between these two terms and their responsibility is essential to understanding what a bookkeeper does for your business.
Difference Between Bookkeeper & Accountant
Both professionals provide essential aspects of your business – bookkeeping and accounting services like Zintego. Bookkeeping is the process of recording a business’s financial activities or transactions. Bookkeepers are involved in the day-to-day operations of businesses and keep records of their receipts, expenditures, assets, liabilities and other items relating to their jobs. A bookkeeper offers bookkeeping services and does not have the capacity to provide you with accounting services. In smaller businesses, bookkeepers often wear the hat of an accountant.
An accountant builds on the information provided to them by the bookkeeper and uses the financial data to make projections and advise clients on various growth elements.
What Does a Bookkeeper Do for Your Business?
- Categorize all transaction
Bookkeepers are responsible for categorizing each transaction and filing them accordingly. They also ensure that the records of transactions are accurate and complete. As a result, they keep track of all the relevant financial information to the business.
- Reconcile necessary accounts
Accounting is the process of recording and reporting the financial activities that entities do concerning assets and liabilities. Bookkeepers are responsible for reconciling the books daily or weekly so that the numbers add up correctly. This helps a business to stay organized in all areas of its finances.
- Handle bills and invoices
Bookkeepers also handle bills, invoices and other documents in the office. This can help you further understand your expenses and assist you in deciding to help reduce these expenses.
- Handle Accounts Payable
One of a bookkeeper’s most important duties is to handle accounts payable. This part of bookkeeping is crucial because it helps keep track of all outgoing payments for the business. A bookkeeper will also make sure that invoices have been paid, records are updated, and checks are written to maintain data integrity.
- Handle Accounts Receivable
Like accounts payables, a bookkeeper also manages the accounts receivable process and is responsible for receiving payments from clients. This can be a tedious task that requires meticulous record-keeping and organization.
- Process Payroll
A bookkeeper also processes payroll for your business. This includes verifying paychecks, working with the employees’ personnel files, and making sure that your workers get all the deductions done.
- Track Inventory
Inventory is the lifeblood of any business. Without it, your business will cease to exist. A bookkeeper can be a boon in this area by tracking what you have and what needs to be ordered. This will save time and money because you don’t have to order inventory twice. It also ensures that you’re not over-ordering–which could lead to wastage or low profits. Bookkeepers also help keep your finances organized as they report on sales, purchase orders, and invoicing (among other things).
- Prepare budget and forecast
A bookkeeper’s key role is to keep track of expenses, revenues and cash flow. A bookkeeper also prepares budget forecasts and assists with forecasting for taxation purposes and growth plans.
- Keep You Prepared For Tax Season
One of the most important aspects of a bookkeeper’s job is keeping your business organized and ready for tax season. With this, they ensure that you have all of your information logged in and prepare all of the necessary documents to save time in filing taxes.
- Prepare key financial statements
Bookkeeping is the process of tracking operations and accounting for revenue, expenses, assets, and liabilities. This involves preparing financial statements such as profit and loss reports.
- Helps to stay compliant
Without bookkeepers, companies would not stay compliant with the government or other external requirements. The role of a bookkeeper usually centers on financial compliance, but it also deals with other topics such as payroll and tax filing.
Qualifications Required for Bookkeepers
To be a bookkeeper, you don’t need any special education. You do need to have strong math and accounting knowledge. A bookkeeper’s duties are primarily administrative and routine tasks, such as providing accurate financial statements to the people you work with. Bookkeeping for small businesses is often effortless. The primary purpose is to keep all the financial information organized, updated and accurate.
Qualities of a Good Bookkeeper
A good bookkeeper is someone trustworthy and committed to the success of your business. They should work efficiently, protect your confidential information, and keep up with market trends. Additionally, they should be open-minded about the different industries they work in.
How to Find a Great Bookkeeper
A bookkeeper is a crucial part of your business, and finding the right bookkeeper is key to having your finances in place.
- Ask around:
If you know a small business owner, ask them if they know any good bookkeepers. It might be someone who is working for someone else, or a friend of a friend who may be able to help you. If you don’t know anybody, ask around at your workplace.
- Try the Yellow Pages:
This is a common practice for many people to find bookkeepers. Bookkeepers are also listed in the yellow pages, which means that you might be able to find someone who is a great fit for your needs. This method offers you the opportunity to interview and meet the bookkeeper before hiring them.
- Check out accredited bookkeeping firms on the Web:
This is the best way to find a quality bookkeeper. This method gives you access to global bookkeepers who are experts in bookkeeping for your business and have experience in different industries. You can hire bookkeeping and accounting services by simply checking out reviews and clientele they have handled before. Another advantage is that you hire a group of expert bookkeepers with bookkeeping services instead of one bookkeeper. There are various plans and subscriptions that will lessen your financial burden.
Bookkeepers are an essential resource for a business, and if you want to succeed in your business venture, you need to hire the right bookkeeper. If you plan to conduct your bookkeeping process on your own, hold that thought. Performing your bookkeeping on your own can be disastrous and end up causing more monetary loss than the amount you thought you would have saved with DIY bookkeeping.
