What Does a Bookkeeper Do?

Keeping accurate and complete financial records is not the most thrilling part of building a business; we give you that. However, one cannot continue to journey in the entrepreneurial world without a reliable bookkeeping system; it is the fuel that keeps your company running. Hence, smart bookkeeping systems help you gather correct and up-to-date information, the key to making wise business decisions.

So, what does a bookkeeper do daily? In this article, we break down the day-to-day function of a bookkeeper. Read on to learn more about how bookkeepers help small businesses and how to choose the right one for your team.

 

Daily Responsibilities of a Bookkeeper

Bookkeepers play a crucial role in data entry, receipt wrangling, and bank reconciliation, which hold a small business’s financial integrity. They are always checking the company’s financial health pulse, ensuring that each financial record is in order.

A bookkeeper is responsible for recording journal entries. They ensure that all financial transactions are entered in the general ledger using double-entry bookkeeping. This manual entry is equivalent to documenting all financial undertakings into accounting software that is usually cloud-based in the modern-day. More than that, they also need to have a good grip on the legal framework, and an on-point analytical skill since audits are their friendly neighbour.

In general, bookkeepers prepare four critical financial statements:

• Profit and loss statement (or income statement) – this financial record shows the business’ revenue and expenses for a given time frame.
• Balance sheets – this is a still image of your financial position at a single time instant.
• Statement of retained earnings (or statement of changes in equity) – this financial statement shows you the evolution of your retained earnings, reserves, and share of capital over a reporting period.
• Cash flow statement – this is the entire history of all cash and cash-like equivalents that come in and out of your company.

These four tasks fall under to either of their three core duties, namely data entry, bank reconciliation, and monthly reports.

Other additional tasks that bookkeepers can likewise keep their hands on include:

• Managing credit control & accounts receivable and payables – bookkeepers create, send, and follow up on invoices to get them settled. On the other hand, they also make sure that invoices from suppliers are exact and paid on time.
• Calculating and processing payroll entries – they process, prepare and report on pay and deductions of all employees in the company.
• Collecting and remitting sales tax to the government – businesses compile sales tax with every purchase and transfer that money to their state accordingly on a monthly or quarterly basis. Failure to remit sales tax payments promptly can result in unwanted penalties.
• Reporting on issues and discrepancies as they appear – journal entries must always balance out, and the deductions should be legal. Once an inconsistency pops up, it must be reported and fixed right away to avoid future problems from occurring.

 

What does a bookkeeper do for a small business?

Most of the time, compiled reports are immediately handed over to managers and business owners to assist them in decision-making. Some bookkeepers, however, are involved in business planning and strategy development. They also have shared responsibilities with the accountants, like annual financial reports, tax return and BAS preparation.

Below are some benefits that make holding onto a bookkeeper worth trying:

• Detailed documentation of financial records and books – reliable history of your sales, bills, expenses, and invoices lead to an audit-proof record and improved budgeting decisions.
• Improved budgeting through well-documented cash flow – when you know where your money is coming and going, you understand your business’ revenue, cost, and profitability better. It also gives you an overview of your business’ seasonal flow, so you know which months to focus on and exert further efforts.
• Gift of time and peace of mind – since the hassle of keeping track of all your financial entries is off your plate, you can now redirect your energy to other essential business tasks, giving you more freedom to grow your company.

 

How to find the right bookkeeper for your company?

Running a business can be a handful. Thankfully, there are trusted bookkeepers that you can always rely on to manage your company’s finances.

 

At Aone Account and Bookkeeping, we provide bookkeeping services, so you focus your attention on other important business activities. Call us now at (02) 4555 1847 or reach us through email at clients@aoneaccount.com to have your finances handled smoothly. We offer a free 1-hour consultation!