What do Bookkeepers Do? Duties & Functions of Bookkeepers

What do Bookkeepers Do? Duties & Functions of Bookkeepers

What exactly does a bookkeeper do

One of the first challenges new business owners face is managing their business’s bookkeeping. Not only is solid bookkeeping required to file your tax returns each year, but it is also necessary to have the financial information you need to make sound business decisions.

  • You don’t need any special training to be a bookkeeper—you don’t even need a bachelor’s degree.
  • This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business.
  • Catch up bookkeeping can take a significant amount of time, so be sure to set aside enough time to get the job done right.
  • For the every so busy small business owner, finding the time and energy to properly maintain your books can be a taxing and arduous task.
  • It details the amounts your business has inassets,liabilities, andowner’s equity.

It is less expensive and time-consuming to have the process done correctly from the start. If you’re thinking about hiring a bookkeeper for your business, you should consider these qualities when evaluating prospective providers. With FinancePal’s bookkeeping services, you’ll have top financial experts equipped with leading technology handling your books. It’s important to keep in mind that the IRS has strict requirements for writing off certain business expenses as well as reporting sales and use taxes. Fortunately, your tax preparer and bookkeeper or accountant should be aware of these. What’s better is that their assistance can also often save you money on small business tax preparation. If you send a lot of invoices or have a complex billing system, you might need an in-person bookkeeper to keep it all straight.

Beyond data entry: data expertise

At the end of the day, a bookkeeper will ensure your company’s financial records are in good hands. You’ll also get peace of mind when it comes to compliance — and a whole bunch of records you can show the IRS. These help you track all your incoming and outgoing transactions in chronological order, giving you a good a picture of your business’s financial health. This involves recording all transactions to find the “balance,” or the difference between a business’s total debits and total credits.

Accountants need to know how to interpret a company’s financial position based on records, receipts, etc. While it might seem like an extra expense you can’t really afford, hiring a bookkeeper doesn’t have to strain your budget. In fact, it can save you a lot in costly errors, the time you could be performing other pressing tasks, and headaches. Your bookkeeper will typically need to be in touch with you on a regular basis in order to get ahold of receipts or to discuss budgetary issues. On the other hand, your accountant will usually only need to speak with you on a periodic basis to discuss your business’ financial position. And, they’ll become more important to your business as it grows.

Reasons Why Bookkeeping is Important for Your Business

Smaller companies may hire a single bookkeeper to do all of the work. Modern accounting software is the repository of all financial transactions for your company and can generate requisite reports in real-time. So even if you have accounting software, odds are, you still need a bookkeeper to manage the software, enter data, file reports, identify errors and keep everything current. At a basic level, your bookkeeping service or bookkeeper What exactly does a bookkeeper do should be managing the transactions brought in through your accounting system’s bank feed. Bank feeds link up your accounting software with your business bank account, allowing you to see each transaction in real time. Bookkeeping is the recording of financial events that take place in a company. Any process of recording financial data is considered bookkeeping and is the first step of data entry into the accounting system.

A firm must understand all its accounts in detail in order for effective accounting practices to operate. The Company’s financial statements and sub-books contain the following accounts. Assets, liabilities, accounts payable and owner’s equity form the financial statements of the business. The asset represents the assets and receivables of the company and includes inventory.

What’s The Difference Between Bookkeeping & Accounting?

Unless you have a finance degree, this means that you could probably use bookkeeping software to take the bulk of that work off your plate. An outsourced bookkeeper is a third-party professional who’s been hired to handle your finances. They might be part of an agency or an independent freelancer. While the Keeper Tax app allows you to handle your finances on your own, we also have a team of real-life bookkeepers behind the app.

If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly. Reviewing the financial statements for accuracy and completeness.

What Does a Bookkeeper Do?

In the U.S., certified public accountants are accountants who have specific training and education and pass a rigorous exam on business and accounting concepts and regulations. Unlike accountants, bookkeepers don’t need specific licenses, certifications, or formal education.

  • Are you a numbers-savvy freelancer with a knack for organization and relatively simple finances?
  • Your business’s accounting needs might not require the in-depth expertise of a hired professional.
  • As you can see, accounting and bookkeeping are different, so these terms shouldn’t be used interchangeably.
  • Bookkeeping is a critical part of any business, as it provides information that can be used to make informed decisions about the business.
  • Technology has surpassed yesterday’s file storage solutions, which is great news for your security.

Any time that your business spends or earns money, those financial transactions need to be classified and organized. An organized system of receipt submission, expense account reimbursement and cash distribution can improve the lines of communication. Organization and communication help to ensure no transactions get missed, so the financial records stay current and accurate. Maintaining financial records is often a time-consuming task because it requires extreme accuracy across every single financial transaction. Part of being accurate is communicating with colleagues or clients.

A bookkeeper can help your business run smoother with implementing some of these day-to-day tasks:

As they receive payments and make bank deposits, they check to make sure those accounts reflect your true income. First, a good bookkeeper generates and sends invoices to your customers, double-checking for accuracy and ensuring timely delivery. They make it a point to understand your revenue streams and business model, so they can anticipate income from multiple sources. Bookkeepers also send follow-up communications, late notices, and reminders to customers, so your backlog of receivables doesn’t become unmanageable or turn into an unrecoverable loss. If you don’t have experience in full charge bookkeeping , you may also need to undergo job training.

Can bookkeepers get in trouble?

In addition to facing criminal charges, you may be liable for damages to victims of fraudulent bookkeeping activities. The victims of bookkeeping fraud often are investors who may sue the company and you for false reports.

But what about those in-between items, like computers, for instance? They’ll also make sure to set up the books so that any future changes will be easy to make. Let’s say you have a business, like ZipBooks, that sells both products andservices. Though you certainly want to know how much you’re doingoverall in sales, you’ll probably want to see a breakdown of how your sales are going on both the products side and theservicesside, too.

Each sale and purchase your business conducts must be recorded in the ledger, and some items will need documentation. You can find more information on which transactions require supporting documents on the IRS website. When you know which accounts to track and have the right tools in place, bookkeeping can be a breeze and not a headache. To help you get started on your journey and see how easy it is, we’ve created a handy checklist you can refer to along the way. For small businesses, bookkeepers also produce inventory reports by counting stock items.

What exactly does a bookkeeper do

That means the bookkeeper will handle all of the vendor bills that the company receives. Bookkeepers will note payment deadlines from each vendor, early payment discounts if available, and submit payment to the vendor. As a company grows, bookkeepers can add on an additional approvers to give the thumbs up for payments. Properly managing your accounts payable is important for maintaining relationships with suppliers and keeping positive https://www.bookstime.com/ trade credit terms. Bookkeepers might also have to manually add any transactions that aren’t included in the bank feed. The transactions that need to be added will most likely be transactions generated outside of the accounting system, such as cash payments or handwritten checks. It could also involve matching deposits as customer payments to help manage accounts receivable or outgoing transactions as payments against vendor bills.

Seizing those nuggets of information enables you to run your business more intelligently and confidently. Managing the bookkeeper responsibilities is the other half. Make sure your accounting team is not only qualified, but on task at all times and it all starts with a proper bookkeeper description in your recruiting manual. This Bookkeeper job description template is optimized for posting on online job boards or careers pages. Add your specific bookkeeping responsibilities to attract the most qualified candidates for your company. When looking for a certified bookkeeper, first decide if you want to hire an independent consultant, a firm or a full-time employee if your business is large enough.

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