What Does a Bookkeeper Do?
Whether you’re looking to hire a bookkeeper or aspiring to become one, this blog has everything you need to know. Dive into the daily tasks, the importance of a full charge bookkeeper, and the best bookkeeper software. Learn practical tips like how I print a check on bookkeeper, and explore many other facets of this essential profession.
Your Frequently Asked Questions about Bookkeepers
In this article, you’ll learn more about what bookkeepers do, why they’re important to a business, and how much they earn. You’ll also explore how to become one.
What Does a Bookkeeper Do?
A bookkeeper takes care of a business’s financial records. They are responsible for maintaining accuracy by recording business transactions, categorizing them, and reconciling records with bank or credit card transactions. Their services are crucial for keeping accurate financial records, which help small and medium-sized businesses make informed business decisions. 80% of small businesses believe having professional bookkeeper improves their financial performance (Source: worldmetrics.org)
What are Benefits of Having a Bookkeeper?
95% of small business owners believe that a bookkeeper’s services are essential for their business. Bookkeepers ensure that small business finances are organized. This allows small business owners to focus on running and growing their small business. Having a bookkeeper for your small business offers many benefits, including:
- You get time to focus on your business because you have accurate financial records.
- You no longer need to worry about tax season as bookkeepers help with tax preparation
- They maintain and keep historical records, which can be crucial during an IRS audit.
When to Onboard a Bookkeeper?
DIY bookkeeping is time-consuming, especially when there is a large volume of financial transactions. Shoebox bookkeeping can be disastrous, as small bookkeeping mistakes can snowball into major errors, potentially leading to business failure. So, when you see any of these signs, it’s worth hiring a bookkeeper.
- Your business is getting neglected, and you are spending most of your time categorizing transactions.
- You’re behind on your books and behind on collecting accounts receivable or sending out invoices.
- You have relied too much on shoebox bookkeeping, and now your bills and receipts are not well organized.
- You are in the dark about making business decisions because your bookkeeping is a mess. You have no idea if it’s the right time to scale up or expand your business.
- Money is nothing less than a ghost. You have no idea where it is going in or out.
- You are always behind your books and every year need to hire a bookkeeper to catch up on books.
- Tax season is a nightmare for you. Your CPA or accountant can’t help because of messy books.
These signs are as bright as daylight. You can ignore them only at a great loss. Don’t let these signs ruin your business. Hire a bookkeeper when it is necessary and before it’s too late.
What Is a Full Charge Bookkeeper?
A full-charge bookkeeper is responsible for all bookkeeping tasks of a business. As a full charge bookkeeper, their services include managing all ledgers, including APs & ARs, payroll, billing, and invoicing. Full charge bookkeeper reports straight to a senior manager, such as the president, and may interact directly with the company’s board of directors and auditors. The services of a full charge bookkeeper may include supervising various accounting clerks. In this role, full charge bookkeeper oversees all aspects of the company’s financial functions and ledgers.
Did you know?
Bookkeeping as a profession dates back to the 15th century when Italian mathematician Frater Luca Pacioli—the father of modern bookkeeping—detailed many accounting systems and tools still used today, including double-entry bookkeeping.
Is it Really Hard to be a Bookkeeper?
According to worldmetrics.org the bookkeeping industry has customer retention rate of more than 89% and bookkeeping industry contribues 1.6% to the global GDB. These figures are impressive. If your considering of working as a bookkeeper and wondering if it is hard to become one? Let’s find out.
Challenges Bookkeepers Face
For most people, the work of a bookkeeper is hard. Apart from their basic bookkeeping services, they need to stay updated about the rules, regulations, and laws of the particular industry in which they are working. Moreover, they must also develop personal qualities and skills, such as punctuality, responsibility, education, and continuous improvement in their bookkeeping skills.
Even if they have the required skills, personal qualities, and knowledge, their job does not become easier. Their role in business success is significant, as they are a crucial part of the puzzle in the big picture of business success, which always puts additional stress and strain on them.
Bright side of Bookkeeping Careers
Unlike the general perception that the bookkeeper’s profession can be very boring, experienced bookkeepers can undeniably argue otherwise. For them, it is a great profession for future career growth.
Despite all the complexities and required skills, it certainly has many advantages. This profession is always in demand; bookkeepers stay in touch with a large number of people, which makes their life amazing. They have the opportunity to control and discipline themselves while working as bookkeepers, develop logical thinking abilities, and work remotely.
Bookkeeper vs Accountant? What is the Difference?
The terms are used interchangeably in some contexts. However, these two professions shouldn’t be mixed up. Making the right decision at the right time is key for any business. There are key differences between bookkeepers and accountants that you need to know before hiring a financial professional or becoming one.
Bookkeepers manage financial records, handle invoices, and generate reports. They provide insights into your business’s financial picture.
Accountants, using these records, build budgets, assess finances, and guide business decisions. They often oversee bookkeepers and have more advanced training.
What Services does a Virtual Bookkeeper Provide?
Virtual bookkeepers are a cost-saving alternative to in-house bookkeepers. Small businesses that do not have enough resources often use the services of a virtual bookkeeper. Virtual bookkeepers manage financial records, categorize them, and reconcile the business’s records using cloud-based accounting software. They get access to the company’s financial records and can remotely help the business maintain accurate financial records.
However, there is a flip side to hiring a virtual bookkeeper. Most businesses are concerned about the security and confidentiality of their financial data. They often need their bookkeeper to be available when making important business decisions. Local bookkeepers based in your city, on the other hand, have experience working in your industry. They have knowledge about rules and regulations and can stay compliant without your input. They manage daily financial tasks such as recording financial transactions, reconciling accounts, and processing payroll directly at your workplace. Their physical presence allows for immediate access to financial documents and direct communication with your in-house team, ensuring that all financial activities are seamlessly integrated into your business operations.
How to Choose the Right Bookkeeper?
Bookkeeping is like the health of your business. Healthier books mean a healthier business. This makes a bookkeeper the family physician of your business. Having the right bookkeeper means your business’s health is in good hands. Therefore, it becomes crucial to make an informed and rational decision about choosing the right person as your bookkeeper. Keep the following factors in mind while making the right decision:
Assess your business needs: You know your business better than anyone. You know where you need a hand to manage your books. Determine your specific bookkeeping and accounting requirements, whether it is basic data entry, financial analysis, payroll, or tax preparation support.
Look at experience: After assessing your business goals and needs, you need to find the bookkeeper that is suitable based on your assessment of your business. Search for bookkeepers with relevant industry-specific experience. The right bookkeeper’s experience must align with your goals and needs. You should also assess their software certifications and familiarity with your industry.
Set a budget: Bookkeeping is a business investment. You get a return in the form of clean books, which helps you make informed business decisions. Ultimately, you get higher profits and controlled losses. So, what’s the point of not allocating a separate budget for hiring a bookkeeper? After choosing the right bookkeeper for your business, you should request a free consultation. If you think you have the right person, ask for a quote with a detailed breakdown of their fees and services to ensure they align with your financial plan.
Set up a consultation session: Take advantage of free consultation sessions provided by reputable bookkeepers in your city. Discuss your bookkeeping needs and problems related to the financial management of your business. You must clarify how often you need to communicate with your bookkeeper and ensure you can easily discuss financial matters with them.
Ready to Meet Your Bookkeeper?
What is the Best Bookkeeper Software?
When it comes to choosing the best bookkeeping software, there are numerous options available for a bookkeeper to choose from, including Zoho Books, FreshBooks, Xero, Netsuite, and the all-time favorite QuickBooks Online. There are many factors that need to be considered when selecting the right software for your business or for your client. These factors include the business size, number of employees, number of financial transactions that need to be recorded, categorized, and reconciled, and lastly, the specific industry. Based on these factors, the right bookkeeping software is selected.
For most businesses, QuickBooks has become a popular choice due to its robust features and user-friendly interface. Bookkeepers for small businesses help business owners with the selection of the right bookkeeping software, set it up, implement a bookkeeping system based on business needs, train the in-house team if necessary, and provide ongoing support.
Bookkeeper vs CPA? What is the Difference?
Both bookkeepers and CPAs are responsible for managing business finances, but their responsibilities differ. Bookkeepers handle day-to-day transactions, keep accurate financial records, manage payroll, and prepare basic financial reports. Their primary focus is on ensuring that all financial data is current and accurately documented.
CPAs, on the other hand, provide more specialized services, including tax preparation, financial audits, and strategic advice. They have in-depth knowledge of accounting and tax laws, enabling them to offer comprehensive tax planning and higher-level financial analysis. While bookkeepers ensure financial records are accurate and up-to-date, CPAs help businesses navigate complex financial regulations and optimize financial strategies.
Is Bookkeeping Hard for a Teen?
If you are proficient and comfortable with mathematics and computing figures, and are punctual, organized, and detail-oriented, it is not hard to learn how to be a bookkeeper. Of course, a background in accounting practices will help you navigate the learning curve as a new bookkeeper.
Where to Market Your Bookkeeping Business?
Professional networking sites like LinkedIn are excellent for finding potential bookkeeping clients. They offer a direct and effective way to connect with business owners, showcase your expertise, and generate quality leads.
How I Print a Check on Bookkeeper?
Printing a check in Book Keeper is quite straightforward. Here are the steps you need to follow:
- Open Book Keeper: Launch the Book Keeper application on your computer.
- Navigate to Tools: Go to the ‘Tools’ menu.
- Select Cheque Printing: Click on the ‘Cheque Printing’ option.
- Customize Cheque Layout: Customize the cheque layout to fit your specific cheque format. Adjust the margins and fields as needed.
- Enter Cheque Details: Fill in the necessary details such as the payee name, amount, and date.
- Print the Cheque: Once everything is set, click on the ‘Print’ button to print your cheque.
Ready to Meet Your Bookkeeper?
How to Find Bookkeepers Near Me?
Local bookkeepers are the right choice for small businesses and startups for many reasons. They have experience working in the same community and are well-versed in local laws and regulations. You don’t need to worry about data security and confidentiality as much as with virtual bookkeepers. They are easily accessible whenever you need them during critical decision-making times for your business. There are many ways to find the right bookkeeper for your business in your own city.
- Online Search: Most popular way to find the right fir for your business is the use of search engine like Google. Simply type “bookkeepers” with your area and you’ll get a list of local bookkeepers. You can further refine your search by adding your industry, the specific services you are looking for or by simply typing your bookkeeping problem.
- Business Directories: Websites like Yelp, Yellow Pages, or local business directories often list bookkeepers with reviews and ratings. On these business directories, you get information about the services bookkeepers provide.
- Social Media: Platforms like LinkedIn or Facebook can help you find bookkeepers through professional networks or local community groups.
- Ask for Recommendations: Reach out to friends, family, or business associates for recommendations.
- Local Business Associations: Check with local chambers of commerce or business associations for referrals.
How Much Does a Bookkeeper Cost?
According to worldmetrics.org, small businesses lose about $33,000 a year due to bookkeeping errors, and the average hourly rate of bookkeepers in the US ranges from $20 to $50.
The cost of a bookkeeper is determined by many factors. Some of these are related to the expertise of the bookkeeper, while others are related to your bookkeeping needs and the size of your business. Always remember that bookkeeping is not an expenditure but an investment in your business’s financial health. Healthier books mean a healthier business.