If you want to ensure your business is on the right track, you’ll most likely need a bookkeeper. A bookkeeper will oversee your transactions, spot errors, and facilitate a more successful way of doing business.
But what does a bookkeeper actually do? If you’re asking yourself this question, you’re probably wondering if you should hire a bookkeeper to help run your business. We’ll discuss the different roles bookkeepers adopt and tell you why they can be vital for maintaining and improving your operations.
What Does a Bookkeeper Do?
There’s no one specific answer to this question. A bookkeeper can take on many different roles depending on the nature and needs of your business.
The primary duties of bookkeepers include recording each business-related financial transaction, ensuring the documentation is accurate, and preparing essential financial statements.
Some of these documents include:
- Income statement – this statement shows the income and expenses you had in a particular period. It gives you a clear insight into how well your business is doing financially.
- Balance sheet – this statement expresses your financial position at a specific time.
- Cash flow statement – this statement shows the amount of money coming in and going out of your company.
- Statement of changes in equity – this statement expresses the changes in your capital, reserves, and retained earnings.
Other responsibilities include:
- Reconciling bank accounts – a bookkeeper checks your statements and matches them to the bookkeeping software. The information and numbers need to match, and a bookkeeper ensures everything is accurate and running smoothly. A bookkeeper ensures every transaction is correct to avoid penalties and prevent money loss.
- Managing bank feeds – a bank feed is a transaction list for your business. Bank feeds are connected to the bookkeeping software and your company’s bank account, enabling you to view every transaction coming in or going out. Typically, the software will automatically sort out the transactions in different categories. For example, a receipt from an airline company will be categorized as a travel expense. However, the software can sometimes make mistakes, and the bookkeeper’s responsibility is to check and fix them. If additional transactions happen outside of the software, a bookkeeper needs to add them manually to the bank feed and keep track of them.
- Handling accounts receivable – bookkeepers can create and send invoices to your customers. The invoices have payment terms clearly stated on them, including the due date for payment. If the due date is missed or there are discrepancies of any sort, a bookkeeper tracks them through the company’s bank account and contacts the customer.
- Handling accounts payable – the opposite of accounts receivable, accounts payable are invoices you pay to your suppliers. Since mistakes are possible, a bookkeeper is there to ensure everything’s in order. Besides that, the bookkeeper keeps track of the deadlines for payments and guarantees the payment of invoices on time. Managing accounts payable is not as easy as you may think. It requires lots of planning not to affect the money flow. If you paid all your suppliers at once, you might not have enough money to cover your other expenses. That’s why a bookkeeper is there to work out the best way to balance the accounts receivable and accounts payable.
- Helping with taxes – a bookkeeper can act as a mediator between you and your tax preparer. Since bookkeepers take care of all of your transactions, they have better insight into your books. When you’re filing for the small business taxes, it’s best to let your bookkeeper take care of it and contact your tax preparer.
- Processing payroll – a bookkeeper can take on a function from human resources. They can handle payments to your employees and offer help with filling out different forms. Also, bookkeepers can keep track of your employees’ working hours and potential overtime. If you have a separate payroll clerk, a bookkeeper can enter the data in your system and ensure everything’s in order.
- Offering software recommendations – it’s in you and your bookkeeper’s interest to have your business running smoothly and leave no room for mistakes. Usually, bookkeepers keep up with the latest trends in bookkeeping and accounting software that can make their job easier and save you money along the way.
Do You Need a Bookkeeper?
Many business owners opt for managing their books by themselves. However, as you can see, a bookkeeper isn’t just someone who enters data into the software. A bookkeeper can have a vital role in ensuring your business is stable and helping develop it further. Think of bookkeepers as doctors for your business. They make sure your business is healthy, and if it’s not, they offer solutions on how to make it better.
An experienced and skilled bookkeeper can make your business flourish by pointing out potential mistakes and helping you overcome them.
You can always learn how to run your books independently, but keep in mind that this process is time-consuming. You’ll need to commit to learning the programs, different laws and rules, and bookkeeping terms. If you’re new at this, it may be easier to leave it to an expert so that you can devote your time to your business.
Why Should You Hire a Bookkeeper?
It might seem like an unnecessary expense, but hiring a bookkeeper will have multiple benefits for your company:
- Bookkeepers will catch mistakes on time.
- They will ensure your bills are paid.
- They will estimate the overall health of your business and suggest potential solutions or ways to grow it even more.
- You’ll learn more about your business and finances by taking advice from your bookkeeper.
- Bookkeepers will save you time. Instead of worrying about bills, transactions, and numbers, you can focus on growing your business.
- They’ll save you money. Although you’ll have to pay for their services, hiring a bookkeeper pays off in the end because their knowledge and expertise can often find less expensive solutions for different problems. Besides that, bookkeepers will offer budgeting solutions and propose cutting unnecessary costs.
- Most importantly, bookkeepers will save you the headache of dealing with unpaid bills or incorrect transactions. You’ll have peace of mind knowing your books are balanced and you don’t have to worry about them.
Find Your Bookkeeping Match
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