A bookkeeper’s duties and responsibilities vary depending on the size of the business. In many small and startup companies, it is common practice for bookkeeping duties to be performed by the business owner. The bookkeeping tasks at this point are simple and easy, and the business owner can manage bookkeeping tasks while staffing the business and growing sales.
As the business grows, time becomes a priceless commodity, and bookkeeping falls to the wayside. It does not take long until the ‘books’ are behind, the credit card reconciliations are not performed, and the owner lacks valuable insight into the business’s health.
Bookkeeping is defined as recording a company’s financial transactions to keep business affairs in order. Bookkeeping can include paying bills, recording payments, managing cash flow, reconciling accounts, and publishing financial statements.
A bookkeeper performs all the daily, weekly, and monthly financial transactions required by a business. The bookkeeper prepares a management report package containing financial reports and other helpful information:
Some bookkeepers assist with other financial and financially related tasks such as bank reconciliations, credit card reconciliation, sales tax calculation, payroll, budgeting, and tax preparation for annual tax returns.
Why is bookkeeping important?
Bookkeeping is often an afterthought or minimized as a process as simple as balancing a checkbook. It far from that! Bookkeeping is essential, ensuring the business owner is aware of the business’s health and financial stability. Major decisions such as hiring, purchasing, and taking on debt should not be made without a clear understanding of the business’ financial picture, and an up-to-date view at that!
What does an accountant do that a bookkeeper doesn’t?
An accountant’s job goes beyond the tasks driven responsibilities of the bookkeeper. The accountant is educated and, in many states, licensed as a CPA to provide valuable insight and interpretation of your financial reports. Accountants offer consulting, compliance, and advisory services that can help businesses make sound financial decisions. They also provide tax services for both corporations and individuals, ensuring that you adhere to the tax code and minimize your tax liability.
The duties performed by the bookkeeper and the diligence of daily, monthly, and annual bookkeeping produces tax ready financials to the accountant.
A bookkeeper can keep your company’s financial transactions current and audit-ready. The best way to reap the benefits of a bookkeeper is in communication. Consistent communication delivers financial insight and peace of mind. As a business owner, this affords you the time to concentrate on growing your business.
Again, depending on your business’s size and complexity, you may not need a full-time bookkeeper to perform the tasks we have discussed. Many small business owners opt to utilize bookkeeping software such as Expex to perform the bookkeeping tasks themselves.
Bookkeepers are held to the highest standard of discretion, confidentiality, and trust. Automated bookkeeping applications implement bank-level security and financial controls to ensuring all aspects of the financial data and transaction processes are safe and secure.