We have all heard the term “bookkeeper”. What does it mean? What do they do? Well, we are here to answer these questions for you. Keeping your books organized and up to date is just a simple task a modern bookkeeper can handle for your business. Depending on the industry or size of the company, a bookkeepers’ duties can become pretty diverse. While keeping track of financial records is not always the most fun part of the business world, we do know quite a bit about the subject.
What is a bookkeeper?
A bookkeeper tracks financial transactions and ensures your business accounts are complete and accurate. By managing and recording the financial actions taking place within your business, a bookkeeper is always on top of the money going in and out of your business. While some people may believe they can handle their own bookkeeping, there are benefits to hiring a professional bookkeeper. When you choose to have someone manage your business books off-site, you are given more time to run your business how you dream of doing so. Whether you sell cars or work in the food industry, there is money going in and out of your business. That’s where bookkeepers come into play.
Back in the olden days, bookkeepers would record information in a “wastebook”. This book would carry a record of all business transactions and would eventually be thrown in the garbage after finding its way into a ledger. These days, as we are sure you are aware, bookkeepers use all sorts of software platforms to track the finances of the businesses they work for.
What does a bookkeeper actually do?
Bookkeepers are responsible for keeping track of and recording every financial transaction in your books. Their duties will always include some data entry and organizing of receipts. While you may be thinking all a bookkeeper does is drop numbers into a spreadsheet, that is not the case. It takes much analysis and some legal know-how to become a bookkeeping pro. Think about it, your bookkeeper is there to help you survive an audit! Bookkeepers have the knowledge and experience it takes to make sure your records are in order and your deductions are legal.
There are four main financial statements bookkeepers are responsible for preparing.
1 – Income statement.
This financial statement shows your company’s revenue and expenses during a particular period. The income statement gives you an idea of how your revenue is turned into net income.
2 – Balance sheet.
This is a summary of the financial balances of your business. All types of businesses have a balance sheet.
3 – Cash flow statement.
By showing the changes in the balance sheet, the cash flow statement breaks the analysis down to operating, investing, and financing activities. This is like a record of cash entering and leaving your company.
4 – Statement of changes in equity.
A change in your share of capital, reserves, and retained earnings is shown in the statement of changes in equity.
While these statements are very important for bookkeepers, there are many more responsibilities a bookkeeper takes on day-to-day. Some of these services include processing payroll, maintaining your annual budget, reporting incoming cash and depositing it to the bank, and more. Bookkeepers can even handle tax preparation!
How does this apply to you and your business?
We recommend a bookkeeper for businesses of all sizes. By choosing to work with an off-site bookkeeper, you will have a better understanding of the flow of your business and peace of mind knowing your books are in order. While some large businesses need a full-time bookkeeper, other small businesses can manage the bookkeeping on their own. If you’re worried about the cost of hiring a bookkeeper, we can assure you that your company will be saving money in the long run.
If you are a business owner yourself, you understand the importance of having your business books in order. Bookkeepers deserve some serious respect if you ask us! Whether your skill is making shoes or repairing automobiles, keep it that way. Let a bookkeeper handle your numbers. Give All About Businesses a call today at 800-264-9168 if you are in need of bookkeeping services you can trust! Let’s get your business growing.