It’s prevalent for small business owners to take on the task of tracking transactions or to handle invoices on their own. A bookkeeper may not appear to be necessary to keep the firm running at the moment. On the other hand, a devoted and professional bookkeeper performs critical responsibilities that add exponential value to your business, especially as it grows.
One of the most important reasons to hire a bookkeeper is to save time, but growth is also essential. When the company picks up, and you’ve got a lot on your plate, it’s a good idea to delegate bookkeeping so you can concentrate on the larger picture.
What is the role of a bookkeeper?
They are experts that oversee and record all of your company’s financial transactions. Make sure your financial records are structured, complete and correct by keeping track of this information. To put it another way, bookkeepers act as a spell check for your finances, as they see everything.
When should your business hire a bookkeeper?
The DIY technique can be too time-consuming for developing organisations with a high volume of transactions to track. When your firm achieves any of the following milestones, you’ll know it’s time to hire a bookkeeper:
- You’re too preoccupied with identifying transactions to concentrate on other aspects of your company, such as selling, creating, and expanding.
- You’re behind on accounts receivable collection or sending out customer invoices.
- You don’t have a system or database in place to keep track of your invoices Natural Phrase and receipts.
You’ve probably figured out that bookkeepers are the ones who provide you with a glimpse of your company’s finances.
What are the responsibilities and duties of a bookkeeper?
Ensure that your bank accounts are in good working order
Reconciliation is perhaps the most critical job of a bookkeeper. When so much money is moving in and out, it is easy for things to slide between the cracks. To avoid this, bookkeepers check recorded transactions to monthly statements from outside sources such as a bank, a credit card firm, or another financial organisation to ensure the statistics are accurate and in agreement. Put another way; the bookkeeper double-checks that the money leaving an account matches the money spent.
Organise your transactions into categories.
Another crucial bookkeeping chore is keeping track of all the transactions that come in via your accounting system’s bank feed, which is a list of all the transactions (spent and received) in your bank account. To keep things orderly, bookkeepers must categorise each of these transactions. A plane ticket, for example, would be classified as a travel expense, whereas a box of pens would be classified as an office expense.
While classification may appear to be an enormous (and time-consuming) task, tools like Receipt Bank can automatically categorise most transactions, requiring bookkeepers to keep an eye out for correctness. Additionally, some transactions, such as written checks or cash payments, may require a human entry.
Prepare the required financal statements:
You’ll need essential financial statements regularly, whether you’re prepared to meet with investors or develop a budget. Preparing these financial statements for you is part of a bookkeeper’s job. The following are the essential financial statements:
- The cash flow statement illustrates how much money was made and spent over a specific period.
- The balance sheet depicts your organisation’s financial situation after a given period.
- The Profit and Loss Statement is a financial statement that displays how much money you’ve made and how much money you’ve lost. How much money was earned and lost? Does this graph depict your company’s revenue and expenses over a specific period?
Bookkeepers are sometimes in charge of payroll, which is the method of paying a company’s employees. While the amount of work involved in “performing payroll” varies, it generally entails calculating each employee’s salary, deducting taxes and other deductions, and sending payments to employees online or via check.
Working with your accountant
As previously stated, bookkeepers collaborate closely with accountants to ensure that financial data is correct. When it comes to tax season, this link is essential. Because they know your financials, your bookkeeper will frequently contact your tax preparer to assist in filing your business taxes.
You don’t need someone to enter every piece of data in today’s environment manually. The ideal bookkeeper should know how to use professional financial software to import and integrate financial data automatically.
A dedicated bookkeeper can conduct most of your financial responsibilities more efficiently and quickly by utilising their technical abilities. This allows you to concentrate on duties that add real value to your company.