Whether you are doing any small and mid-size business whether it is property management, e-commerce, handmade, software, legal adviser, or any other business, one thing is certain you are earning and spending money and in maintaining these financial records the one that helps you is the bookkeeper.
Rarely, one would wonder what exactly an accountant does throughout the day. With the help of this blog, you will be able to know the entire routine of the bookkeeper. Some people may find the term ‘bookkeeper’ quite confusing but it is often used with accountants. Bookkeeping and accountants actually have completely different roles within a business.
Difference between a Bookkeeper and an Accountant:
In simple words, the accountant is a finance expert who advises you on all the essential aspects of your business. The primary role of a bookkeeper is to maintain accurate business records. The data collected by a bookkeeper is often used by business owners and accountants to make financial decisions.
Bookkeeping is a subset of accounting. Bookkeeping training can be done by an accountant or by an individual. They often prepare business financial reports and tax returns, providing the most basic and necessary items of financial infrastructure from which more advanced accounting practices can be carried out.
What Does a Bookkeeper Do For Business?
Recording and managing any financial data is more complicated than copying a receipt into a spreadsheet. Bookkeepers are responsible for recording each financial transaction in a common ledger, which is called journal entry recording.
Bookkeepers must have a strong understanding and experience in specialized accounting software along with being proficient in their work. This enables them to create detailed reports and to create advanced data records.
Basically, bookkeepers are responsible for preparing four key financial statements:
- Profit & Loss
- Balance sheet
- Cash flow statement
- Statement of changes in equity
There are also some other important things that can help in running your business such as:
- Manage accounts receivable and accounts payable
- file sales tax to the government
- Managing business repayments
- Producing invoices
- Chasing debtors for payment
- Handle bank reconciliations every month
- hire CPA with accurate financial statements to come tax time
- Maintain annual budget
- Report on issues and variances when they pop up
- Process payroll
They can also usually take care of certain tax preparations so that your accountant has to reduce (which is a good thing, because bookkeeping is less expensive than CPA). But they will not be able to help you with tax planning or handling your tax return.
Bookkeepers can also take care of some of the tax preparation so that your accountant has to work less. If seen, bookkeepers are less expensive than CPAs. And they can also help you in your tax planning or handling your tax return.
What a bookkeeper can do for your business:
Why do you need a bookkeeper? If you have a good, certified, and experienced bookkeeper, you will get the following benefits:
- With better budgeting decisions, you can know exactly where your money is going
- Get your books in order and will not have to scramble with tax season
- Audit-proof business with detailed documentation
- The core focus on your business
- Know your business’s financial health: revenue, costs, profitability, etc.
If you run a small or mid-size business, it is not necessary that you hire a full-time bookkeeper. You can either buy any bookkeeping software or do it yourself or you can outsource your bookkeeping to a part-time, virtual bookkeeping service like Mindspace Outsourcing Services.
If you think it’s time you need to hire a bookkeeper? Our highly experienced bookkeepers are ready to jump in and can help you maintain your books.
For all your accounting Needs contact us : US: +1 786 871 2066 | India: +91 141 402 3431 | UK: +44 20 7096 0555 or write us: [email protected]