A bookkeeper is a person who is responsible for handling. recording and maintaining the financial transactions and affairs for a business. They can be responsible for transactions as simple as entering an expense receipt, up to processing payroll, and preparing financial reports for business owners. Today this work often involves cost-effective software usage. Bookkeepers need to be accurate, efficient, and up to date about debits and credits, accounts payable procedures, accounts receivable procedures, the charts of account, payroll, GST, legislation etc. Bookkeeper’s responsibilities are specific according to the business’s type and size.
A bookkeeper produces the financial framework ready for the Accountant to prepare an end of year tax returns and financials. What does a bookkeeper do on a daily basis? There’s no direct answer. A bookkeeper does different things depending on what a business needs. Though the bookkeeper’s role has many sides, there are some centers tenants to what a bookkeeper does. First, we need to address the questions which are almost on every business owner’s mind that “what do bookkeepers do?” “What does a bookkeeper do for a small business?” “Why does a small business even need a bookkeeper?”
What Does A Bookkeeper Do For A Small Business?
Let’s address the first question- why does a small business need a bookkeeper? A small business owner realizes over time the reason why they need a bookkeeper. Their areas of expertise and intention of starting a business were not in the interest of bookkeeping duties. They will notice they can find a better use for their time and have other areas in the interest where they want to focus their time and attention to. Now as we understood the need for bookkeepers, let’s move to the part that what a bookkeeper does.
Role of Bookkeepers: There are multiple aspects to talk about.
- A bookkeeper helps the firm grow faster: Outsourcing is done for one good reason. It enables you to get maximized returns on your competencies. It gives you valuable time to focus on growing your firm and working on the areas you are an expert in. You can bring in more customers/clients through effective marketing strategies. You do not have to manage hiring, training, reviewing, managing, firing processes of having an in house person doing your bookkeeping. An external bookkeeper helps you reduce your costs in the time spent on boarding and training a new team, as well as the costs and overhead associated with having an employee do the work instead of an external bookkeeper.
- Projects and new clients: When you outsource your bookkeeping, your service delivery capability increases as you free up more time. You can focus more on the growing and maintaining off your business and services, and ensure you do not lose out on new clients or projects due to lack of time to give.
- Pay for the actual work done: When you outsource bookkeeping, you pay only for the real work done. You don’t have to pay for overheads, payroll taxes, vacation, sick leaves, training, etc. It helps you increase profit significantly also it helps you to deliver more work at a given period.
- Reduces the risk of losing staff: When staff suddenly leave, the effect this can have on the operation of a business can be quite significant. It means on board a new team member, it means the stress of either you or another team member taking on this work until you find someone, it is the extended working hours to ensure all the work gets done. Small or medium firms do not have ‘buffer staff’ to handle those kinds of situations. If you have outsourced your bookkeeping, you get to work with a reliable expert team, and there is always a backup plan. With outsourced bookkeepers, you do not need to worry about losing staff as the organization has additional team members available to adjust with such situations and leaves no impact on the services they are used to being provided.
- Improvement in Productivity and Quality: The errors in accounting, the delays, and the need for reviews from in-house team member’s results in loss of money. If you outsource your bookkeeping, the work is done right the first time, and there is no wasted time or money in re-doing something that could have done been done correctly in the first place. You receive work of quality.
- Better quality service: The staffs of Outsourcing companies get their training by working in multiple firms. When you outsource your bookkeeping, you get the best minds working for your firm. It finally becomes a huge advantage, and you get to deliver the best quality service.
- Introduces new Services: Outsourcing services such as bookkeeping from within your business, can allow for you to grow new services that can provide you with increased income and the availability to hire a new expert team to assist in this new service. You can leverage the capabilities of an outsourced bookkeeper, to leverage your own business and your services provided.
- Adjustment with Business Cycles: Outsourcing helps you to increase staffing, and you can adjust quickly to your business cycle. It provides you flexibility which would have been difficult to achieve on your own.
- Earn more, work less: The advantage of outsourcing is you earn more money without having to work more. You save yourself valuable time. First, you save money by without having to give payroll taxes, paid leaves, overheads, super, etc. You also do not have to pay for lost productivity. You earn money on time and get an expert team. You get to have a balance on the work-life cycle that not everyone is able to have.
- Increase valuation with higher productivity: When a firm is being bought, the buyer carefully evaluates the profitability of the firm which was purchased. Outsourcing bookkeeping makes the firm more profitable than the firms which have not outsourced their bookkeeping. It increases the value of the firm. When you’re raising borrowed capital, higher valuation can get better terms and can spare you thousands of dollars.
At the basic level, the bookkeeper manages the accounting transactions and bank transactions. The bookkeepers manage the books and reconcile the bank accounts against bank statements each month. Bookkeepers can also create sales invoices, send it to customers, provide statements and assist in collecting payments from customers. Bookkeepers can also manage all the business owners accounts payable such as entering supplier bills, tracking due dates, and making payments to suppliers. It is a collaborative process between bookkeeper and management. If required, Bookkeepers are able to take the role of payroll manager and also can provide monthly reports to the management and business owner such as a Balance Sheet and Profit & Loss to assist you with understanding how your business is doing financially.
They can prepare Business Activity Statements if the business is registered for GST, and also super and PAYG if the business has employees. They keep track of upcoming lodgement and due dates for payment, ensuring you stay compliant with legislation, and software updates. They have a wide range of services they are capable of providing to any business. They also take the role of translator between the business owner and Accountant’s, as bookkeepers prepare the financial framework for the Accountant’s and understand their financial language. They provide services to save time and money by streamlining operations and ensuring accuracy and efficiencies within the books and your financials.