The focus of a bookkeeper within a small business is to organize, record and report financial transactions as part of the operational life of a small business. More recently, bookkeepers have expanded upon their roles and duties and now frequently fulfil such tasks as:
Developing, implementing, maintaining and reviewing all internal processes relevant to the business
Implementing processes to better manage documents and inventories, leading to greater business efficiency
Training clients in the use of accounting software
Helping businesses to use POS systems, or ‘point of sale’ in retail environments to better capture daily transactions
Many bookkeepers tend to specialize in one area, and it’s advisable to ask them about this when you’re considering hiring them.
What does a bookkeeper do?
Businesses both large and small can benefit from the services that a bookkeeper provides, and here are some of the tasks that they will fulfil when you hire them:
A bookkeeper will keep close tabs on all daily transactions, ensuring that they are recorded accurately, including bank transactions. It may be that some businesses are using accounting software that has automatic daily bank feeds, and this will be a great tool for the bookkeeper, enabling them to monitor cashflow and save them time on data entry.
They will send out invoices on your behalf and take full management of the accounts receivable ledger, which includes the responsibility of chasing late payments.
Bookkeepers usually make payments on behalf of the business they are working for, and their duties will include paying supplier invoices, taking charge of expenses and petty cash.
Your bookkeeper will keep a close eye on the day-to-day running of the business and be responsible for ensuring that it doesn’t run out of money that could be needed for daily expenditures. They monitor the balance of revenues to expenses and will take formative action or give guidance should it look as if the company may require more ready cash.
While a bookkeeper can fulfil multiple roles within a business, there are some elements that an accountant will take care of, and it’s the bookkeepers responsibility to make sure that the accountant has accurate and timely accounts to work from. The accountant can then use their specific knowledge and skills to report to the board, complete company tax returns and make business recommendations.
In short, a bookkeeper handles the daily running of a businesses finances so that the accountant can focus their energies upon formulating strategic financial operations. A bookkeeper is vital to the success of a business, and when combined with the expertise of an accountant, they can help make a business a success, and keep them on the right side of the IRS.