A bookkeeper records your business or organization’s financial transactions – petty cash, purchases, sales, payroll, revenue, expenses, and other transactions.
This could handle tasks such as entering data into accounting software, reconciling bank statements, and preparing financial reports.
Bookkeepers ensure that financial records are accurate and up to date. They may also be involved in budgeting, forecasting activities, tax preparation, and supporting the accounting department.
If you are planning on hiring bookkeeping services, it’s best first to understand why you need a bookkeeper and a bookkeeper’s responsibilities.
- Data entry: Recording daily financial transactions in and out of the company and ensuring the balancing of books.
- Reporting: Generate financial reports that inform you of the business’s financial position.
- Records accuracy: Maintain and monitor financial records for accuracy.
- Transactions reconciliation: Match and reconcile transactions with bank statements and other sources.
- Follow-up Accounts receivable: Create and send invoices. Follow up with customers with reminders for quick payment and maintain a healthy cash flow.
- Payroll: Manage the payroll process by calculating employee payments and deductions.
Bookkeepers may also help with…
- Tax filing
- Accounting period reports
- Meeting with accountants on behalf of clients.
- Creating business strategy
- Training employees on the use of software solutions.
Why is bookkeeping important for a small business?
Some of the reasons bookkeeping is essential to business owners are:
- Record keeping
- Financial tracking
- Tax Preparation
- Informed decisions
Keeping track of your important financial documents, such as receipts, invoices, and contracts, is necessary during an audit, tax authorities, or legal issue.
Bookkeeping helps a small business owner track ad keep accurate records of financial transactions.
This shows how much money is coming in and going out of your company and helps you identify potential issues or areas for improvement.
For small business owners seeking tax deductions, having accurate records of financial transactions can help in tax preparation.
It provides the necessary information to complete your tax returns.
When you keep track of your financial transactions, it’s easy to create and monitor budgets that optimize expenses for healthy business cash flow.
Accurate income, expenses, and revenue records can provide valuable insights for informed decisions that affect your business’s future.
Potential investors or financial institutions can also use the records to understand the ıf the company is in a good financial position for loans or investments.
As a business owner, bookkeeping is essential and should be addressed.
Often, small businesses focus on growing, improving sales, and expanding operations but must remember to keep accurate records of transactions.
Bookkeeping shouldn’t take the backseat in your business operations. As stated earlier, it is vital to your company’s success.