A bookkeeper juggles a lot of responsibilities during the course of a day, handling many different aspects within a company. Depending on the industry, they can easily handle many different jobs at various times. Here are some of the responsibilities that a bookkeeper will deal with:
Their First And Foremost Responsibility:
Their first responsibility is keeping the financial books in order. According to many professional bookkeepers, they need to keep the books reconciled. This means balancing the books of a company including the assets, liabilities, or equity accounts to verify their legitimacy. Bookkeepers must have a firm understanding of accounting principles and any special requirements that must be met in a certain industry, Most bookkeepers have degrees and some continue their education to further their knowledge.
Bookkeepers are always in the banking industry for many different transactions that need to be added or downloaded. They also track checks, credit cards, and debit cards.
Many Other Duties Performed By Bookkeepers:
- Organizing and categorizing expenses such as taxes, itemizing office supplies, and dealing
with reimbursable expenses.
- Recording the company’s bill payments.
- Making payments for invoices to show clients and/or vendors have paid and those that still
owe funds.
- Posting reports that summarize financial information for the business owner(s) or stockholders.
- Handling all money that is owed to a business whether products or customers.
- Accounts payable, which would be outstanding payments a business might owe to another
company for various services or goods the business purchased on credit.
- Will take care of all payroll transactions as well as a company’s inventory.
In many cases, the business owner or owners must identify the most important duties performed by their bookkeeper(s). A bookkeeper’s duties can change, depending on the kind of business and what the business owner(s) require. Overall, a bookkeeper will be involved in performing the upkeep of financial records.
Are Bookkeepers Necessary For Running A Business?
Quite honestly, yes! Many business owners start off handling the task of keeping track of all expenses, and paying bills but often do not keep track of their banking reconciliations. Over time, many business owners will come to the realization, they cannot do their jobs and keep up with the bookkeeping end of the business. Small businesses will get mired down if the owner is trying to perform their duties as well as the necessary bookkeeping. Having a good bookkeeper allows the owners to stay focused on their responsibilities and let the bookkeeper deal with all the financial concerns.
Hiring a bookkeeper allows other people within a business to focus on what they need to take care of, leaving these duties to someone who is probably more qualified to take care of and keep the business out of harm’s way from financial problems. Having someone professionally taking care of a business’s books is safer and much smarter than letting a novice deal with it. A professional bookkeeper should give a business owner the confidence that everything will be taken care of correctly and accounting issues, such as taxes, will not be overlooked. When it’s tax season, owners need someone on their team that will handle the taxes and keeps the business out of harm’s way.
Also, a good bookkeeper can spot areas of growth or various trends that can affect the operation of the business. Because they are so involved in the financial aspects of the business on a daily basis, they can also spot patterns that others in the company may not even notice. A bookkeeper will watch over expenses being spent to help the owners reduce their overall costs. This is something that a business owner probably wouldn’t even be aware of or have the time to deal with.
Hiring A Bookkeeper:
In many cases, small businesses will hire a bookkeeper as a freelancer or under a contract. In other cases, businesses will hire someone as part of the staff. Either way, bookkeepers whether outsourced or on staff, will outweigh the cost.
At some point, they have to decide if hiring a bookkeeper is to their advantage or not. To determine if this is a good choice for your business, start paying attention to the hours being spent doing the bookkeeping yourself which means cutting into your productivity for growing your business. Think about the money you are losing doing the bookkeeping yourself vs hiring someone. You might be quite surprised to discover you could save a great deal of money bringing someone else in to take care of your bookkeeping. Keep in mind, when tax season rolls around, the stress could increase enormously if you try and take care of the bookkeeping yourself. If you mess up, it could seriously harm your business and quite honestly, it’s not worth it.
You Should Have A Basic Knowledge In Bookkeeping:
Even if you bring someone in to take care of the business accounts and records, as the owner, you should have at least a basic knowledge of bookkeeping to ensure whomever you hire is not taking advantage of you. Understanding a bookkeeper’s basic duties and your business’ financial situation will help prevent the possibility of fraud.
Because you built your business, chances are you have a certain level of knowledge regarding the financial end. If bookkeeping is still somewhat of a challenge, it’s advised you take a course in bookkeeping to understand the duties and demands placed on a professional bookkeeper. It will also help you decide what candidate would be the best choice for the position when you are looking to hire someone. You should look into bookkeeping courses being offered at your local college or check with a business development center which will probably have a course. Another avenue, look into the Small Business Administration and see if they offer online courses.
Keep in mind, you do not have to go for a degree in bookkeeping but knowing the basics will help you enormously with your business financials. Also, when you hire a bookkeeper, any questions you have or if you need to sit down with them to discuss issues, you will have a good understanding of what a bookkeeper’s tasks are whether it’s dealing with payroll or other important transactions. Let’s face it, you need someone you can rely on that understands how to keep your business healthy and legal!
Should You Hire A Bookkeeper Or An Accountant?
It can be a little confusing to understand the differences so here is some information to clarify a bookkeeper vs an accountant.
A bookkeeper takes care of all financial transactions while an accountant analyzes and summarizes the financial end of the business.
There are similarities between a bookkeeper and an accountant as well. In many cases, their duties will overlap. Both deal with important financial data and require a good knowledge of accounting. For small businesses without an accountant, a bookkeeper can take care of some of the accountant’s financial duties. In some cases, a bookkeeper will use software to make their tasks easier. Some small businesses have an accountant but not a bookkeeper to take care of their financials. That said, it’s important to understand that accountants are qualified to take are of all accounting aspects from the beginning to the end while bookkeepers only deal with actual transactions.
Many times, accountants work with bookkeepers by reviewing their work while bookkeepers keep track of the information accountants have already analyzed. Both positions have very distinctive responsibilities and both are quite valuable in their own rights.
Should My Business Have A Bookkeeper Or A CPA?
That depends on your business whether you should have both. A Certified Public Accountant has a degree in accounting. This means they have successfully passed all their exams on topics such as regulations, financial reporting, and audits. Becoming a CPA is not an easy task so you can be sure if you hire a CPA they are at the top of their field.
A CPA is specialized and has greater qualifications but often charge higher rates for their services. They can handle difficult financial issues, help with business loans, work on tax planning and file your taxes. If you are looking at a CPA who has worked for a corporation, they are probably specialized in some areas that your small business might need.
A bookkeeper and a CPA usually work together. A bookkeeper will handle basic accounting and month-end closings, the CPA will deal with more complicated financial issues and tax returns. It’s always a good idea to have a CPA to look over your books once a year to ensure your finances are in order. They will know if your business is in good shape and point out any issues that might surface.
Your bookkeeper can also serve as a go-between for you and your CPA during the tax season. In many cases, your bookkeeper is probably more familiar with the financial end of your business than you are. They can handle all questions presented by the CPA and all questions you have, they can easily pass on to the CPA.
Referenced from: http://bookkeepingad.com/