What is a Bookkeeper?
As the owner of a small business, keeping the company’s finances in excellent health is one of the most significant challenges of all. Maintaining a great sense of organisation is vital, and you’ve probably thought about hiring either an accountant or a bookkeeper to stay in control. While a lot of SMEs can benefit from having an accountant too, a bookkeeper is the one that should be considered essential.
Here’s all you need to know about what a bookkeeper can do for your business, and why you should hire one ASAP.
Bookkeepers V Accountants
First and foremost, it’s important to understand the differences between a bookkeeper and accountant. Otherwise, you’ll have no way of knowing which option is best for you. An accountant will primarily serve to prepare the statutory returns, provide general financial advice for the business, and advise legal entity structures.
A bookkeeper has a more varied role, playing a far more central focus in the day-to-day running of the operation. The bookkeeper helps to keep the business organised from a financial standing by recording and reporting all financial transactions associated with the business.
What Does The Bookkeeper Do?
While the above summary of the role gives some insight, the bookkeeper’s role will include several distinct aspects. The list consists of;
- Tracking and recording all daily transactions
- Preparing and sending invoices to clients.
- Chasing late payments and managing the accounts receivable ledger.
- Handling the accounts payable ledger, covering invoices, expenses, and petty cash.
- Preparing the accounts and books for the accountant.
- Monitoring cash flow.
The bookkeeper may also teach clients how to implement accounting software and use it in conjunction with their bank for automated recordings. Their work may also include using automated POS (point of sale) systems to capture the data of transactions.
Essentially, a bookkeeper will serve to keep your financial matters in great health across 365 days of the year while working with your team to ensure that every member takes financial responsibility.
The Benefits Of A Bookkeeper
By having a professional bookkeeper at your disposal, the business can reap a whole host of rewards thanks to the accurate and up to date recording of transactions. The benefits include;
- Save time by not having to complete the recordings yourself.
- Increase the speed and accuracy, particularly with the implementation of automated tracking.
- Gain mental reassurance of knowing the accounts are up to date and in order.
- Prevent the threat of missed client payments being forgotten about.
- Know exactly where the business stands from a financial perspective.
- Manage petty cash and cash flow with ease.
- Pinpoint problematic issues that require attention.
- Keep employees in the know at all times.
- Make life easier for the company accountant.
Ultimately, a bookkeeper is one of the most important people in any small business operation, and their work will improve the daily running of the business as well as the long-term financial recording and preparations. Given that their impacts can be felt with almost immediate results, this is a recruitment decision that is well worth making.
Who Can Be A Bookkeeper?
Both bookkeepers and accountants are positions that should be held by professionals. A qualified bookkeeper will have studied and completed their bookkeeping qualifications while many will additionally boast accountancy courses to their name too.
Aside from an extensive education in the field, the bookkeeper should boast an array of other skills including;
- Great organisation to ensure that they stay on top of the logging tasks and protect company files.
- Great communication, especially if they are to take on the additional tutoring duties.
- Great time management to ensure that the financial records are kept up to date.
- Great tech skills to help implement the tech software needed to automate many of the transactions.
- Great analytic skills to understand the findings of the recorded data and provide advice.
Trying to complete those bookkeeping assignments without having the requisite skills, experiences, and education can backfire spectacularly. Aside from the threat of missing some transactions or recording them in an incorrect or muddled fashion, it will take an unqualified person far longer to complete the challenge. Given that time is money, the professional route is the only one worth taking.
The Final Word
While most small businesses appreciate the need for smart financial management, many miss out on the best possible weapon for their arsenal. By adding a bookkeeper to the firm, the entire operation will see the benefits.
No matter what stage your operation is at, getting a bookkeeper is undoubtedly one of the smartest things you’ll ever do.