Skip to main content

What Does a Bookkeeper Do for a Small Business?

For Small businesses, capital management is imperative. From shaping an idea into a business model to investing in its growth, every step of the business requires capital. And to keep track of a company’s financial transactions and recording it in the company's general ledger accounts, businesses need professional bookkeepers.

While many small businesses prefer to do their books by their own, seeking professional help is always a wise option. So what does a bookkeeper do?

Here’s what you need to know about the importance of hiring a professional bookkeeper:

Bookkeeper for a Small Business

A Bookkeeper might have different tasks at his/her hand depending on the size of the business. However, the core responsibility of a bookkeeper includes recording and organizing the company’s financial transactions (income and expenses). 

Looking for - Bookkeeping Services for Small Business

Why should Small Business owners hire a Bookkeeper?

Small Business owners often overlook the importance of seeking professional help when it comes to bookkeeping and prefer doing it themselves. However, it can prove to be a costly mistake at times as well as consumes enough time rather than allowing business owners to focus on core business responsibilities.

Responsibilities of a Bookkeepers at Small Business Firms:

Bookkeepers generally take care of the following for SMEs: 

  • Record financial transactions

Keeping a record of a company’s financial transactions including income and expenses is the core responsibility of a bookkeeper. A bookkeeper records and updates the financial data in the company’s general ledger.

  • Reconcile bank accounts

Reconciling financial accounts is another primary task of a bookkeeper which makes sure that the transaction details of your business on your bank account statements are accurate and matches with that on the accounting software. Regularly reconciling your financial statements is very important since it makes sure that there are no data discrepancies or other irregularities.

  • Billing and following up on Accounts Receivable Accounts Payable

Accounts receivable and Accounts Payable are very crucial to businesses as it defines the financial position at a given point of time. Bookkeepers usually take up this work of recording both AP and AR as they are important financial data and help in determining the debt vs credit owed by a business.

  • Work closely with the tax preparer

When the tax season arrives, it can get pretty hectic for the tax preparer to get the company books organized within a short span of time. However, bookkeepers keep the books well-organized all throughout the year, they serve as a mediator between your business and certified accountant.

  • Payroll functions

At times, Bookkeepers can also take over payroll responsibilities for your small business or they can assist you in payroll data entry on Accounting software since payroll is a part of business expenses and needs to be tracked and recorded while maintaining company’s books. 

Summing Up:

What does a bookkeeper do for a small business? - Bookkeeping is all about maintaining your books on a regular basis and keep them well-organized for you may need them during the tax season as well as to understand your financial position which will help you in making crucial business decisions.

While it may seem to be an easy job, it requires both precision and expertise and top of that a professional bookkeeper can save your valuable time by overtaking those duties from you and you can take care of other important business aspects.

Labels:
Location: United States

Comments

Post a Comment

Popular posts from this blog

What is Statutory Compliance in Payroll?

Payroll is a complex process with changing legislation, varying allowances and deductions and compliance issues. Many businesses manage payroll in-house while some outsource it to a third party. The goal is to adapt constantly changing legislation and to avoid compliance risk. One of the most important concerns of an employer is to meet statutory compliance in payroll. Payroll is one of the most regulated functions in an organization that must meet federal, state and local jurisdictions requirements.  What is Statutory Compliance ? Compliance is the process of fulfilling official requirements.  Hence, statutory compliance is a legal framework to which organizations must abide by. In nutshell, statutory compliance means adhering to rules and regulations.  A lot of hard work, time and money goes in to make sure payroll is compliant through statutory audits. Each company has different payroll challenges, but what you need is the solution that must be reliable, i...
1 comment
Read more

What are Operating Expenses? (Explanation) - Ledger Bench

  Operating expenses are incurred by businesses to keep the business going, includes staff wages, supplies not include manufacturing cost. Operating expenses does not include manufacturing cost or cost of goods sold (direct labor, material, manufacturing overhead) or capital expenditures (building or machinery)  What is included in Operating expenses? Following are included in operating expenses: Insurance Rent Research Utilities License fees Accounting fees Office supplies Attorney fees Vehicle expenses Travel expenses Payroll for staff excluding labor for manufacturing  Marketing including social media channels such as Facebook Building maintenance and repairs Property taxes on real estate Operating expenses are reflected in the company's income statement. What does an increase in operating expense mean? An increase in operating expense would mean less profit for a business. Often operating expenses receive ...
1 comment
Read more

When we need to outsource accounting & bookkeeping?

Business needs both financial and management reports for the growth of its company. Your business needs basic financial reporting for compliance and making sure your books are accurate. As the business grows, you find it difficult to tackle every aspect of your business. Most bookkeepers only know how to handle billing, collections, deposits, payroll etc. When you reach a point where a bookkeeper is not sufficient this is when outsourcing comes into the picture. Accurate and timely accounting is vital to keep your business afloat.  What is outsourced accounting and bookkeeping? Outsourcing accounting and bookkeeping is a service which provides full accounting experience for small businesses. An outsourced accounting department handles day to day transactions of the business, accounts payable, accounts receivables, payroll, management financial reporting and many other services. Outsourcing offers a team of professionals at a lower cost as compared to hiring in-house.  ...
1 comment
Read more