A bookkeeper is an accounting professional. They help keep your business's finances current and accurate. You can help improve your business finances and make better decisions. We'll review the key roles and duties of a bookkeeper, outline the importance of bookkeeping, distinguish between a bookkeeper and an accountant, and mention requirements for achieving success in the position.
What Is a Bookkeeper?
A bookkeeper records, organizes, and maintains the financial records of a business or organization. Their day-to-day duties include managing general accounting ledgers, recording journal entries, and generating financial statements such as cash flow statements, profit-and-loss statements, and reconciliation statements.
If you're looking to speak to a bookkeeper, give us a call at 847-234-5000.
The Importance of Bookkeepers in Business
Bookkeepers play an important role in business, and their function is vital for the financial health of your enterprise or organization. They help keep accurate records of daily financial transactions, allowing you to track your business's income and expenses, monitor cash flow, and generate critical financial reports required for budgeting, investing, forecasting, and managerial decision making.
Bookkeepers improve the operational efficiency of your business by providing the data needed for internal and external audits and compliance with tax regulations. Their work also allows your higher-level financial staff to focus on the core operations necessary for strategic growth and sustainable business development.
Core Bookkeeping Roles and Responsibilities
The following are the core bookkeeper duties and responsibilities:
Managing Day-To-Day Accounts
The main duties of a bookkeeper involve managing the day-to-day financial accounts of a business or organization. This includes recording every sale and purchase and balancing the accounts at the end of the shift. This makes it easier for your business to track cash flow and make income and expenditure projections.
Keeping Financial Records Current and Accurate
A bookkeeper is also responsible for keeping your business's financial records up-to-date and accurate. They do this by maintaining the general ledger. The general ledger is a comprehensive record of all the financial activities. It contains all the information about the various accounts, transactions, and debits and credits. This is important, as accurate and current financial records can help your management quickly identify discrepancies between the books and business accounts, making it easier to resolve inconsistencies.
Creating Financial Statements
A bookkeeper helps to create financial reports. Based on the data in the general ledger, a bookkeeper prepares the profit-and-loss statement, cash flow statement, and balance sheet. These financial reports provide your managers with an overview of the cash flowing in and out of the business, the balance of assets and liabilities, operating expenses, and liquidity.
Managing Accounts Receivable
A key bookkeeping job role is managing accounts receivable. This involves preparing and sending invoices to clients so that your business can receive payments promptly. It also entails recording and tracking payments received from customers, updating customer account balances, and maintaining their payment history. A bookkeeper will also likely be the one to follow up with customers regarding overdue invoices.
Managing Accounts Payable
A bookkeeper is also responsible for managing accounts payable, which involves tracking the amount your business owes to creditors, vendors, and suppliers. The role can involve processing invoices from vendors and suppliers, scheduling payments, and recording and updating payments made to suppliers and vendors in the organization's accounting system.
Preparing for Tax Audits and Compliance
By keeping your company's financial records up-to-date and accurate, the bookkeeper helps you prepare for tax audits. Accurate financial records can also help you maintain compliance with financial and tax regulations. Not only does this reduce pressure on your business during the tax season, but it can also prevent costly fines from the tax authorities.
Processing Payroll
If you have a small business, the bookkeeper may also be in charge of payroll and other human resources functions. They can help process paychecks and tax payments to employees and perform other related functions.
Managing Bank Feeds and Cash Flow
A bookkeeper manages the transactions in your business bank account in real time via software to ensure there are no discrepancies. They also monitor the balance of expenses to revenues to ensure that there's always money to run the day-to-day business activities.
Besides these major functions, bookkeepers may also perform inventory management and stocktaking, manage foreign currency transactions, and prepare books for an accountant.
Key Differences: Bookkeeper vs. Accountant
While a bookkeeper is a finance professional, they're different from an accountant. A bookkeeper is in charge of basic accounting functions, such as recording transactions, issuing and paying invoices, preparing reports, and ensuring that a company's financial data is up-to-date and accurate. An accountant uses the records a bookkeeper creates to assess company finances, prepare budgets, and make forecasts and other business decisions.
The accountant typically supervises the bookkeeper's work and usually has higher educational requirements, such as a degree in accounting or an equivalent professional certificate. In large organizations, entry-level accountants may perform bookkeeping functions, but bookkeepers can't work as accountants.
Becoming a Successful Bookkeeper
You'll need the following essential skills to become a successful bookkeeper:
- Basic knowledge of accounting
- Knowledge of accounting best practices
- Data entry skills
- Attention to detail
- Accuracy
- Proficiency in common bookkeeping software
- Organization and communication skills
You may also need a professional certificate or at least an associate degree to work as a bookkeeper. While bookkeeping is an entry-level role, having some work experience can also improve your chances in the field.
Pursue a Rewarding Bookkeeping Career With Pasquesi Sheppard
Bookkeeping can be a rewarding profession if you're in an environment that rewards hard work and excellence. At Pasquesi Sheppard, we offer bookkeepers exciting career opportunities, allowing them to do what they love in a supportive atmosphere. From immersive apprentice programs, highly competitive compensation packages, comprehensive health benefits, to generous paid time off, our bookkeepers work in an environment that's dedicated to their growth. If you're in Lake Forest, Illinois, contact us today and propel your accounting career to the next level.
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