When you run a business or even want to handle your own personal finances, you may have heard that you need a bookkeeper. It has an important role in the financial world, and many people neglect to use them. The main reason for this is that they often do not know what a bookkeeper and its role is, and this stops them from reaping the benefits of working with one. 

Below, we’re going to tell you everything you need about bookkeeping and bookkeepers. Keep reading to find out more and decide whether you want to use one yourself.

What is Bookkeeping?

Bookkeeping is systematically recording, organising and maintaining a company’s or individual financial transactions. This means recording sales, purchases, receipts and payments regularly. The most important purpose is to maintain accurate financial statements, as anything less could harm the ability of a business entity to have visibility when making critical decisions and preparing reports, accounting and tax returns. 

This work usually involves basic data entry into a bookkeeping system, reconciling bank statements and generating reports. It is the basis of accounting, as financial analysis, budgeting, and strategic planning rely on this data.

The Responsibilities of a Bookkeeper

Bookkeepers are the masters of providing accurate and up-to-date financial information for a company. They keep a close watch on the financial well-being of the organisation. Such reports are typically generated by bookkeepers and used to inform business owners or managers to make better decisions. Bookkeepers may also assist with strategic planning. 

Bookkeepers might also co-manage some work with accountants, like preparing annual financial statements and tax returns. This creates a cross-functional solution to guarantee the management and compliance of all financial areas with respect to relevant laws.

What are the Main Duties of a Bookkeeper?

There are several duties that bookkeepers have, and each of them has an important role in helping businesses and individuals with their finances. Here are the main roles they usually take on:

Bookkeeping

The prime function of a bookkeeper is to record financial transactions. It includes the right documentation of all transactions pertaining to your money, such as sales, purchases, income transfers and any other payments made by a business. The term bookkeeping comes from the fact that these entries are usually recorded in account ledgers.

Keeping a general ledger

Bookkeepers are responsible to make sure that the company’s general ledger, which is its main accounting record, should be updated. This covers by posting every transaction details and reconciliation of accounts.

Reconciling accounts

Bookkeepers may also be managing the company accounts, reconciling them with external statements such as bank accounts, and regularly ensuring consistency and accuracy. This helps identify and resolve inconsistencies.

AR and AP balancing

Bookkeepers oversee accounts receivable (invoices from customers) and their corresponding payments due to the business, as well as managing company obligations such as bills or invoices sent by vendors/suppliers. This involves creating invoices and tracking all payments, including chasing for outstanding funds.

Payroll processing

Calculation and processing of employee wages, taxes & deductions. This also involves keeping employment records and abiding by both labour laws and tax codes.

Generating financial reports

Standard financial reports (income statement, balance sheet, and cash flow) are made available as needed. These reports also assist in making decisions, as they give a detailed view of how the company is faring financially.

Budgeting assistance

Help prepare budgets and projections of financial statements. It includes looking at historic financial results and anticipated future revenues, expenses and cash flow constraints.

Tax preparation support

Baseline data clean-up and organisation for pre-tax preparation preparations. This involves keeping correct records throughout the year for a neat and legal tax submission process.

Compliance

Making sure all financial transactions and record-keeping practices are in line with applicable laws & regulations. This keeps them abreast of any new financial regulations and standards.

Communication and coordination

Collaborating with accountants, auditors and management to prepare financial data. This may include providing explanations of financial data and helping with fiscal planning applicable to a given business.

Why Should you Hire a Bookkeeper?

There are several advantages to hiring a bookkeeper, which can contribute substantially to your business’s financial health and productivity.

• Bookkeepers are trained in precision to ensure accurate records of a company’s finances. Their experience helps keep your books current and error-free so you can trust the data when making decisions.
• Managing finances can be a time suck. Hiring a bookkeeper allows you to concentrate on the crucial aspects of your corporate function, such as sales and purchasing.
• It is not easy to navigate through the labyrinth of tax laws and financial regulations. A bookkeeper helps to ensure that your business stays in compliance with all applicable laws, which lowers the chance of fines or penalties.
• Let’s face it, financial management is something that can be stressful, especially during tax season. Worry no more as a reputable bookkeeper handles these chores and lets you enjoy your time in expanding the horizons of your business.
• As your business grows, its financial complexities will also grow. Ideally, when you grow, a bookkeeper with proper skills can adapt to meet your needs. A good bookkeeper should scale their services to match what is being required while still keeping accounting reports in order and up-to-date so the financial side of things does not deteriorate.

Choose Reed & Co Accountants for Expert Bookkeeping Services

Bookkeeping can bring a lot to your business and also help with your personal finances. While you can try to do many of the jobs yourself, they might turn up inaccurately and actually end up hurting your financial situation in the future. That’s why you need to find a trained and experienced bookkeeper who can do the job for you perfectly. 

Reed & Co Accountants is the company you can trust with the most reliable bookkeepers. We work closely with every client, ensuring they get the very best out of our services. Contact us today for a free consultation and to get started.