Bookkeeping helps businesses to keep their financial data current and accurate. As a small business owner, you are juggling multiple responsibilities – with bookkeeping being one of them. If you have just started, such multitasking is feasible and works. However, as your business grows and its stakeholders increase in number, bookkeeping becomes a lot more time-consuming and complex. If you have gotten a little behind on your finances, you may need to have someone help you catch-up with your bookkeeping, so that you can get back to focusing on other things!
Keep reading to learn what a bookkeeper does, how they are different from accountants, and how a dedicated bookkeeper will help your small business.
Who is a Bookkeeper?
A bookkeeper helps maintain a company’s financial records. In other words, a bookkeeper documents and categorizes a firm’s accounting transactions. Without this, businesses would not be aware of their current financial state and of the transactions taking place. The professionals work primarily entails:
- Checking and verifying source documents, including receipts and invoices
- Allocating and posting financial transaction information from source documents to subsidiary books, such as a cash book and a purchase book
- Providing data to the company’s external or in-house accountant to help create financial statements
- Helping a business comply with federal, state, and local government reporting requirements
Besides these, there are several other routine tasks that a bookkeeper carries out, which include:
- Purchasing equipment and supplies
- Monitoring company supply levels, and reordering as required
- Making prompt payments to suppliers
- Issuing invoices to customers
- Reconciling different bank accounts
- Maintaining petty cash funds and issuing financial statements
- Processing payroll
How are Bookkeepers Different from Accountants?
A bookkeeper documents and classifies a company’s financial transactions. The accountant, on the other hand, analyses, appraises, reports, and interprets the company’s financial data. Since both professionals deal with financial information and have a similar educational and work background, most people mistake one for the other.
Both bookkeepers and accountants work toward the same goal, but they do so in different phases of a business’ financial cycle.
How Does a Bookkeeper Help a Small Business?
Bookkeeping needs certain skills. If you are a small business owner who wants to don the bookkeeper hat, you should at least have a penchant for numbers. If your passion lies in selling or consulting, you will find it hard to motivate or convince yourself day in and day out to keep these records for your firm.
Proper bookkeeping is imperative for a small business to thrive and grow. If a fledgling firm doesn’t have a clear and accurate image of the different aspects of its financials, it will be hard-pressed to make sound and better business decisions for the future.
Accurate bookkeeping also safeguards a business. For instance, your business could be under a government audit or embroiled in a vendor dispute. Without proper financial records, you could be at the risk of paying tax penalties or tax settlements for financial errors that could have been avoided. Similarly, bookkeeping would help uncover or prevent fraud, whether they’ve been done by your vendors, customers, or employees.
Equally important, bookkeeping saves your business invaluable time. From managing invoices to handling payroll taxes, efficient bookkeeping streamlines the different financial responsibilities and chores so that you don’t waste time tracking down each dollar.
Hire Bluefire Accounting
Contact Bluefire Accounting if you want a bookkeeper that specializes in serving small firms. Solely run and managed by myself, Neha, Bluefire Accounting provides bookkeeping for small businesses and start-ups based in Charlotte, NC. I will deal with you directly and help your business set up things from scratch. There would be no middlemen and, thus, zero potential for miscommunication. I can do 1099 filing for your company and also offer catch-up bookkeeping services if you’ve been late to the bookkeeping party. Call/email today for a free consultation.