Running a small to medium-sized business requires keeping track of your cash flow. You have to make sure vendors get paid, invoices become entered into computer systems, and transactions are recorded. Who you hire to perform these daily tasks can help keep your transaction records accurate and ensure taxes, as well as audits, are performed efficiently. Bookkeepers provide vital services to companies of all sizes whether your company offers services or products.
What is a Bookkeeper?
A bookkeeper performs transactional work for a company. They do not require certification to perform the job. A person providing bookkeeping services must show proficiency in math and recordkeeping skills to track daily cash flow data. The bookkeeper records general ledger entries regarding purchases, payments, sales, and receipts -- among other transactions. They review transaction information to ensure it is accurate and perform bank reconciliation services.
What are the Typical Duties of a Bookkeeper?
A bookkeeper typically handles all transaction records. In the past, they would use paper ledgers and record the data by hand. Today, there is a range of software available that allows for easy data entry. Besides managing transactions, they will create invoices and post debits/credits. Other tasks include managing the payroll for employees to ensure salaries are accurate before being sent out to workers. They also evaluate ledgers to ensure accuracy while maintaining and balancing accounts as well as subsidiaries. In addition, a bookkeeper may perform these other services:
- Manage bank reconciliations on a monthly basis
- Report any inaccuracies, anomalies, or issues found in transactions
- Manage debt payments
- Prepares required financial statements (balance sheets, income statements, statement of retained earnings, & cash flow statements)
Are Bookkeepers the Same as Accountants?
An accountant may have some overlapping bookkeeping duties. Yet a bookkeeper cannot perform the same duties as an accountant since they do not have certification for that job role. Keep in mind that the primary role of a bookkeeper is to manage and maintain all day-to-day financial transactions of the company.
An accountant will analyze the financial records prepared by the bookkeeper to provide financial consulting services. They provide financial reporting for the preparation of tax returns, provide business insight regarding investments, offer information for forecasting, and help owners discover business opportunities. An accountant may also perform audits of bookkeeping records and help business owners understand the financial impact that their decisions will have on current and future operations.
Does Your Business Need a Bookkeeper?
A bookkeeper provides a range of essential services to small and medium-sized business owners. Perhaps the most important advantage is that they perform transactional work when you don't have a regular accounting department. This aspect frees up time for yourself and your employees, allowing everyone to focus on other tasks.
When you want to know a direct assessment of business finances, a bookkeeper provides this information without any financial opinions or advice. They provide you with the hard numbers regarding cash flow, debts, expenses, and working capital to provide a current snapshot of your finances.
When talking about the importance of bookkeepers, they help keep your financial transactions organized on a daily basis. They provide detailed and comprehensive records that business owners, workers, accountants, and key stakeholders can use to make sound business decisions. For more information about bookkeeping services for your company, reach out to AccountingDepartment.com. We can assist you with all of your client accounting services needs.