What Does a Bookkeeper Do? Essential Bookkeeping Tasks

  • Home
  • What Does a Bookkeeper Do? Essential Bookkeeping Tasks

what does a bookkeeper do

Let’s explore what bookkeepers do, examine some of the benefits of bookkeeping, and explore your options for using a bookkeeper. With their variety of skills and tasks, bookkeepers come in many shapes and sizes. You’re on your way to understanding your business better and plotting a course for future growth when you hire the right bookkeeper. Calculate the value of your time, and then determine how many “dollars” you spend on bookkeeping each month. Reconcile your books with the monthly balances you receive from your financial institutions and correct discrepancies. Nearly every responsibility of a bookkeeper requires close attention to detail and accuracy in numbers. Not surprisingly, bookkeepers should like math or be comfortable working with numbers and computer programs.

what does a bookkeeper do

As much as possible, pay vendors on time to avoid late payment penalties. If you don’t have enough cash, try utilizing a line of credit to borrow quick cash. For small businesses, bookkeepers also produce inventory reports by counting stock items. If there are any discrepancies, they report back to the business to make sure you can address problems quickly. Bookkeepers also make sure to maintain accurate foreign currency accounts, utilising current exchange rates. This can be made much easier with compatible digital bookkeeping apps that can instantly analyse exchange rates without wasting much time. Accountants’ qualifications depend on their experience, licenses and certifications.

Company

Tim is a Certified QuickBooks Time Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. It’s packed full of useful tips on how to get started, how to maintain the books and what to look for when choosing the right software to meet the Making Tax Digital initiative. However, all of the things we’ve mentioned above don’t necessarily mean you need to outsource to a professional. While it sounds like hard work, it’s quite straightforward when you know what you’re doing. That’s where bookkeepers come in, as they can help make sure your business stays aligned with the relevant laws. Accountants will either quote a client a fixed price for a specific service or charge a general hourly rate. Basic services could cost as little as $20 an hour, while advanced services could be $100 or more an hour.

what does a bookkeeper do

One of the most important tools in your toolbox is the bookkeeping service. Legal matters shouldn’t be handled by anyone other than a lawyer, and bookkeeping shouldn’t be handled by anyone other than a bookkeeper. CPAs hold a complete picture of their employer’s financial situation, making them valuable advisory team members. By contrast, bookkeeper positions focus more on day-to-day record keeping. However, for some employers, higher education is not a necessary bookkeeping qualification. In some cases, relevant experience and accounting knowledge may carry more value than educational background.

Are you suited to be a bookkeeper?

Realistically, this is impossible in today’s business climate, and most entrepreneurs have to take the responsibility when starting out. While there is no clear answer to when exactly is the right time to hire a bookkeeper, a smart time to consider the idea is when the business is scaling. This is because entrepreneurs will have to manage a great deal more work when the business scales, and the bookkeeping can end up low on the priority list. Single-entry or cash-based bookkeeping records transactions once as either debit or credit in the cash book. Additionally, if you work as an accounting clerk within a large company, tasks are typically more specialized according to the BLS. For instance, instead of working so much with a general ledger, accountants work primarily with financial documents or statements.

  • The goal of a financial audit is to ensure transparency in the business’ financial reporting, and any errors in bookkeeping can incur penalties for the business.
  • The point here is that hiring a CFA means bringing highly advanced accounting knowledge to your business.
  • These financial reports show a businesses bottom line and operating expenses, the balance of assets and liabilities as well as the cash flowing in and out of the business.
  • User reviews of professionals are based solely on objective criteria.
  • To receive this certification, an accountant must pass the required exams and have two years of professional experience.

If you are interested in becoming an accountant, it may be beneficial to your career to become a certified public accountant , which has its own exam. You must have a minimum of 150 postsecondary education hours, or what amounts to a bachelor’s degree in accounting, and an additional 30 hours of graduate work. Bookkeepers often need to get receipts for company purchases made by coworkers, reimburse employees for expenditures, create travel vouchers, disperse petty cash and record receipts for all transactions. 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.

Who Should Do Your Small Business Bookkeeping?

While many small businesses hire an accountant as a consultant, you have several options for handling financial tasks. According to professional services agent Ageras, there are several advantages to hiring a bookkeeper to file and document your business’s financial records. Staying on top of your finances is a key part of being a successful small business owner. Your financial data must be current and accurate so you have the tools you need to make sound business decisions and implement healthy cash flow strategies.

There are several types of accounting certifications that accountants obtain to expand their skill sets and gain positions within larger organizations. In addition to CPA credentials, other common accounting designations are chartered financial analyst and certified internal auditor . A bookkeeper with professional certification shows they are committed to the trade, possess the skills bookkeeper and expertise required, and are willing to continue learning new methods and techniques. Bookkeepers aren’t required to be certified to handle the books for their customers or employer, but licensing is available. Both the American Institute of Professional Bookkeepers and the National Association of Certified Public Bookkeepers offer accreditation and licensing to bookkeepers.

Leave a Reply

Your email address will not be published.

Let’s Talk About How Can Help You Securely Advance

Get A Free Quote
What Does a Bookkeeper Do? Essential Bookkeeping Tasks
What Does a Bookkeeper Do? Essential Bookkeeping Tasks