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