Bookkeepers reconcile
the financial account of the company on a monthly basis and they make sure that
there’s a record of the income, transactions and expenses of the company in
their book. They can also help with the preparation of financial report and
financial statements. Most bookkeepers are employed as freelancers, although
they can be employed as a staff in the organization.
Depending on what the
organization wants, bookkeepers can come in any form you want, the business
accounting software is what a lot of bookkeepers use today for their work.
Also, there are not many things every bookkeeper out there can handle in your
business. Although a bookkeeper’s role has a lot of layers to it, there are
some major tenets to the job of a bookkeeper.
The fact that you’ve
been curious about the job of a bookkeeper shows you’re also thinking if you
might need one. We’ll take you through the job of a bookkeeper, what they
charge, and how to get one.
WHAT IS THE JOB OF A BOOKKEEPER?
This question does not
have a straightforward answer. Bookkeeping differs, depending on the business,
the same with other job fields. Here are the main tasks that a bookkeeper is
expected to perform:
- Keep records of any financial
dealings
- Reconcile your bank
books
- Manage bank feeds
- Handle accounts
receivable
- Handle accounts
payable
- Assist in tax
compliance and work with the person who prepares your tax
- Prepare financial
statements
- Take on some functions
of human resources and payroll
- Process
recommendations for streamlining and make technology
Here’s a more detailed
analysis on the job of a bookkeeper:
RECONCILE YOUR BANK
BOOKS
Reconciling your
financial accounts is the most important task for any bookkeeper. This process
involves making sure that the details of the transaction in your software
accounting is in synch with the one in the bank account statements, credit card
statements and other statements of accounts out there.
In order to avoid
fraudulent chargers, overdraft fees and transactions that are not properly
recorded, it is imperative that your accounts are reconciled regularly.
Reconciling your accounts is very easy to do now with the help of the accounting
software, but someone has to operate the software and make sure the records are
up to date and correctly done.
MANAGE BANK FEEDS
Your bookkeeper or the
services you’re being offered on bookkeeping at the normal level should be the
management of transactions that was brought in via the bank feed of your
accounting system. With the help of bank feeds, you can merge your accounting
software with your business bank account, letting you see both transaction for
real.
Depending on its
effectiveness, you should be able to put some transactions in categories with
the use of the accounting software. Example, the transaction made on your
credit card from airline bookings can automatically be categorized as travel
expense. Bookkeepers track this transactions and make sure they are correctly
categorized.
If a transaction is
not in the bank feed, bookkeepers might need to add it manually. These are
transactions that were generated outside the accounting system, like
handwritten checks or payment in cash. It might also be a transaction that is
outgoing that was made as payments against the bills of a vendor or are deposits
that matches the payment made by a customer for the management of accounts
receivable.
HANDLE ACCOUNTS
RECEIVABLE
There are different
ways by which accounts receivable can be managed. As earlier stated, workers in
small business might be inputting their own invoices or estimate, and probably getting
payment against the invoices.
Nevertheless, there is
an alternative. In order to calculate the job, an industry-specific estimating
program is used by the client, which sums up everything for the bookkeeper. They
can keep making invoices as the project is moving or the estimate can be
entered into their QuickBooks Online.
The A/R services we
provide for our clients include, assisting in collections, statement provision,
creating invoices and sending them to clients. The bookkeeper is alerted of any
payment by the customers, the payment is entered into the QuickBooks Online and
a deposit is created by us to go with what is taken to the bank by the client.
HANDLE ACCOUNTS
PAYABLE
A lot of bookkeepers
also handle the accounts payable of their clients with account receivable. This
means that all the bills the company receives from vendors is also handled by
the bookkeeper. They keep track of the deadline for payment of every vendor,
discounts for early payment if there is one and make sure payment is submitted
to the vendor. Bookkeepers can add extra people that can approve payments with
time. In order to maintain a good relationship with your suppliers and maintain
a positive credit terms, it is important that your accounts payable are well
managed.
WORK WITH THE PERSON
WHO PREPARES YOUR TAX
A lot of times
bookkeepers don’t remember to mention the fact that they also serve as a kind
of translator between your enrolled agent or certified public accountant and
you. Sometimes it is much better for your bookkeeper to contact the person who
prepares your tax when you want to file your small business taxes, because they
are more familiar with your books.
PREPARE FINANCIAL
STATEMENTS
There are three main
business statements that most bookkeepers will prepare for you, they are;
profit and loss statement, balance sheet and cash flow statement. It is
important that your financial statements are updated on a monthly basis, and
also towards the end of the year. The bottom line of your business and
operating expenses is shown in your profit and loss statements. The balance of
your business’s assets and liabilities are shown in your balance sheets. The
cash coming in and out of the company is reflected in the cash flow statements.
Bookkeepers can prepare all these financial statements and share them with your
accountant and tax preparer with the aid of this software for accounting.
PROCESS PAYROLL
At times, bookkeepers
also help in processing payroll and also perform some human resource functions.
Your job as a bookkeeper might include working in payroll or you might be
assisted in paying tax and forms or in processing paychecks. After reports has
been submitted to you by your payroll service provider, or a data from a file
provided for you might have been imported, a payroll data might be imputed into
your accounting system. Timesheets management for employees who are paid by the
hour or who work overtime can also be managed by bookkeepers.
PROCESS
RECOMMENDATIONS FOR STREAMLINING AND MAKE TECHNOLOGY
Bookkeepers
are well versed in terms of the best and latest technologies around. It’s not
abnormal for a new solution or app that will make the job better to be found by
your bookkeeper, for example self-employed accounting software, most especially
if a lot of their clients work around the same area. There might be a new
technology that can help in cutting the cost of labor. Bookkeepers love looking
for new and efficient ways to make their job easier and help run things smoothly
in the back office. With this, they make a very valuable addition to your
organization.
THE COST OF HIRING A BOOKKEEPER
Typically, for normal
bookkeeping tasks, bookkeepers that are freelancers charge around $30 to $50
per hour. If it’s just a part time bookkeeper you need for easy tasks like data
entry, the charge might be less than that. You have to spend if you’re looking
for a professional that will prepare tax and do accounting work.
These are the factors
you need to take into consideration when you’re looking to hire a bookkeeper
and the amount you want to pay them:
- The kind of job you
want the bookkeeper to perform
- The volume and
complexity of the financial transactions of your business
- The working experience
of the bookkeeper
- Working hours in a
month
- If you use any sort of
accounting software and the type ( a lot of bookkeepers use QuickBooks Online)
- The location of your
business
THE DIFFERENCE BETWEEN A BOOKKEEPER AND AN ACCOUNTANT
A bookkeeper is
trained for categorizing, reconciliation of financial transactions and
recording. A lot of accountants have degrees in accounting and are very good at
interpreting financial records to make recommendations for business.
A lot of people find
it difficult to differentiate between a bookkeeper and an accountant, and
truthfully some bookkeepers actually do the work of accountants. Example,
bookkeepers can easily prepare financial statements with the aid of the
accounting software, a job that was usually done by accountants.
Think of bookkeepers
as cooks that prepares meals. The books are prepared by the bookkeeper and a
financial record that is accurate is made available by them. While the
accountant is the food critic. Meanwhile, the accountant investigate the
financial records further and analysis the finances of the business. One of the
jobs of an accountant is to advice you on how to save costs and make more
profit and also help you to understand how your business decisions impact you
financially.
BOOKKEEPERS HELP TO GET YOUR BUSINESS ON TRACK
You’ve been given an
insight into the job of a bookkeeper and how they contribute to your business. Bookkeeper
do not just do data entry and consult accounting books, there’s a lot that they
do, much more than a lot of small business owners care to know.
Next time, when you’re
wondering, “What does a bookkeeper do?”, now you are aware that it ranges from
reconciling accounts to payroll processing, it may even be that they do all the
above mentioned.
Lastly, depending on
the needs of you and your small business in terms of bookkeeping, you’ll get
your answer. At the end of the day, letting your bookkeeper track the finances
in your small business will give you more time and energy to focus on making
your business grow.
Many thanks for the article to AD Bookeeping – https://bookkeepingad.com