Bookkeeping is the process of recording financial transactions and other information related to a business or organization. This includes keeping track of income and expenses, payroll, accounts payable, accounts receivable, and more. But more than that, what a bookkeeper does is give you peace of mind. When you hire a bookkeeper, you get an expert at managing business accounts, tracking expenses and income, and ensuring that your quarterly taxes are paid accurately and on time. But that’s just the short answer. Let’s get down to the nitty gritty of what a bookkeeper can do for your small business.
What can a bookkeeper do?
Most bookkeepers are no longer keeping hard copy “books” and ledgers to track financial statements and other transactional information for business owners. To manage bookkeeping services, they may use spreadsheets, accounting software, and even bookkeeping apps that connect bookkeeping software to banks and other financial institutions to make tracking income and expenses easier. They perform a variety of bookkeeping tasks all designed to help you manage your small business finances in a healthy and prudent way.
Bookkeepers use these tools to complete data entry and record transaction details for both income and expenditures. They’ll track credits (incoming money) and debits (outgoing money) for each account of your small business. They can manage both paying bills and employee payroll. Bookkeepers can create a balance sheet, income statement, cash flow statement, statement of changes in equity, and many other types of financial statements that help you understand where your business is financially. Each detailed report can highlight a different snapshot or key metric of your businesses’ financial health at any given time.
Bookkeepers also produce and/or pay invoices for inventory orders, services, outgoing transactions, and other bills. They can manage accounts receivable, accounts payable, and employee payroll services. This ensures that your bills get paid, your employees get paid, and you get paid on time. Their attention will ensure that you don’t have any overdue accounts, and that any debt payments happen on time. They can ensure that you have a healthy cash flow throughout high and low-volume cycles of your business.
Because they have the full financial picture of your small business, your bookkeeper can help you make better budgeting decisions, identify patterns, and understand the seasonal flow of your income and business expenses. They can help you understand the metrics of your company’s financial health, monitor debt levels, keep you up to date on any tax code changes, and report on issues as they come up. They can highlight the financial impact of business decisions and provide the best value recommendations for a financially sound future.
Beyond the practical services that a bookkeeper provides, their value also lies in the efficiency they bring to your small business. As a small business owner, you obviously have the acumen for managing the financial details of creating and owning a business. Still, hiring a bookkeeper means you have a financial expert keeping an eye on the bottom line, helping to ensure that all your choices lead to a more focused and successful financial makeup within the framework of your business. Even freelancers can benefit greatly from the organizational and financial benefits of a good bookkeeper.
One of a bookkeepers’ most important tasks is to monitor financial records to ensure they are accurate, which means reconciling and reporting any discrepancies found in the bookkeeping records. They’ll be able to minimize and correct errors to ensure that your financial reports and data are accurate. The peace of mind and attention to detail that a bookkeeper brings can be invaluable if your business is audited. Having accurate bookkeeping records can make the auditing process go much more smoothly than if you have incomplete records.
They also free up your time and allow you to focus on the areas of business ownership that you excel at or enjoy the most, such as planning for future growth, focusing on customer and user experience, or creating new products and services. And as your business grows and your accounting needs increase or become more complex, your bookkeeper can also train additional bookkeeping staff to meet the changing needs of your professional objectives. One of the best financial decisions you can make is to hire an expert bookkeeper who can support the financial health of your business and train other employees to do the same.
Sound Accounts provides bookkeeping, payroll, and licensing services for small businesses. Contact us to see how we can best support your growing business.
For quick answers to a few of your bookkeeper inquiries, check out our frequently asked questions below.
FAQ’s
What does a bookkeeper do?
A bookkeeper records and reconciles all financial aspects of your small business. They can maintain financial records, manage invoicing, bank reconciliation, payments, and payroll. They manage day-to-day accounting tasks in addition to generating both annual and monthly reports to keep you up to date on the financial health of your business. And their experience can simplify the process of paying small business taxes each quarter.
How can a bookkeeper help my small business?
They can take the load of making and recording financial transactions off your plate. Their expertise can give you peace of mind and free up your time to manage other areas of your small business. They can also help you understand the overall health and seasonal patterns of your small business, provide business recommendations, and help you make wise financial decisions through accurate reporting.
Can I just use a bookkeeping software instead of hiring a bookkeeper?
Bookkeeping software or cloud-based bookkeeping services are fantastic resources, but they are only as good as the information you put into it. It can store your business transactions, but it can’t make intuitive business decisions, identify growth areas, or catch mistakes and reconcile errors in the same way that a person can. Hiring a bookkeeper is an investment that will pay off for your small business.
