Bookkeepers are the people that assist you in trying to keep track of everything. That’s good, but what exactly does a bookkeeper do? How can they be beneficial to your small-scale business?
These are some crucial questions that might be pinning you if you have been considering employing an accountant or bookkeeper? To find out how a bookkeeper can assist you in running your business smoothly, and whether hiring one is going to be any different than self-updating your accounts on a day to day basis, keep scrolling!
First things first, it is important to understand that a bookkeeper is mainly employed to take charge of some or all of a company’s accounting. Bookeepers keep track of all payments and record the debits and credits in the general ledger, be it manually or some accounting software. In addition, they also generate income statements and other documents for managers and supervisors to overview conveniently.
Nonetheless, the following are the core duties that a bookkeeper performs:
- Keep track of all financial transactions.
- Reconcile bank accounts
- Control bank inputs
- Accounts receivable management
- Accounts payable management
- Help with business taxes by collaborating with your tax preparer.
- Make financial statements.
- Take on particular payroll and human resource responsibilities.
- Make suggestions for simplifying technology and processes.
Still unclear of what a bookkeeper can do for you? Let’s break down the work in detail:
Categorize All Transactions
If you already have a bookkeeping software to facilitate daily automatic bank transfers, it will undoubtedly serve as excellent feature for your bookkeeper. It will enable them to handle all of your bank transactions by putting them into the software accurately every day.
Moreover, the bookkeeper will also be responsible for collecting releavant data from payroll, expenditures, payment systems such as Stripe or PayPal, and other sources. However, some transactions, like written checks or cash transactions, might need to be entered manually.
When it comes to regularly maintaining your financial records, reconciliation is critical. In fact, the reconciliation of your financial accounts is perhaps the essential duty of every bookkeeper. It guarantees that the transactions in your bookkeeping software match the transactions on your bank statements, credit card receipts, and other financial information. The balance is essential!
Moreover, to minimize overdraft fines, fraud charges, or improperly reported transactions, reconciliation of the accounts on a routine basis is vital. Indeed a bookkeeping software facilitates the process, but personal interaction is still necessary to ensure that every transaction is correctly recorded.
Make Important Financial Statements
Whether you’re ready to speak with investors or just drafting a budget for your business, you’ll require essential financial statements on a daily basis. A bookkeeper’s job entails preparing the following important financial documents for you:
- Cash Flow Statement: Displays how much money was made and spent within a specific period.
- Balance Sheet: A balance sheet depicts your business’s financial status at the end of a specific time.
- Income Statement: Displays your company’s revenues and costs over a specific period.
- Burn reports: Burn reports indicate start-ups and other new businesses how rapidly they spend money so they can determine how long they can operate.
Manage Bills and Invoices
Another duty your bookkeeper performs is handling your company’s bills and invoices in addition to monitoring and recording transactions. This implies that the bookkeeper will be in charge of all vendor bills received by the firm. This includes accounts receivable and payable.
Furthermore, as your business expands, a bookkeeper is likely to may add more stakeholders to aid in approving the transactions. Establishing connections with vendors and maintaining good trade credit conditions requires proper accounts payable management.
Work with Your Tax Preparer
Bookkeepers also act as a communicator between you and your qualified public accountant or authorized person. This is because these professionals have a lot more personal understanding of your accounts. Hence, it is advisable to occasionally have your bookkeeper notify the tax preparer when the deadline to submit your small company taxes approaches.
Payroll may be a time-consuming job, especially if you have a lot of employees. Besides, in order to ensure that the salary distribution process if properly aligned every month, get you bookkeeper to assist in reviewing timesheets, assigning any commission payable, computing payroll tax, and maintaining correct worker records such as bank account information.
In other words, the bookkeeping system and the bank account work hand in hand in handling the employee payroll. So, if you handle your payroll weekly or monthly, hiring a bookkeeper will spare you a lot of time.
By generating regular financial reports such as profit and loss statements, balance sheets, budgets, and cash flow forecasts, a bookkeeper will ensure that you have timely access to all data that’s essential for enhancing your business’s financial performance. Additionally, they may advise you on what needs to be improved and what sections are doing well enough to be advanced to the next level.
Allow ALP Peak to handle all you bookkeeping tasks expertly today, and give yourself the freedom to develop solid business strategies and improved functionality!