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What Does a Bookkeeper Do for a Small Business?

Posted by ledgerbench on May 27th, 2020

We know a bookkeeper’s job is to record daily business transactions, produce invoices, chase payments, process payroll and get the small business ready for tax deadlines. Bookkeepers ensure that all of a company's expenses, incomes and transactions are recorded in the company’s books and reconcile the financial accounts on a monthly basis.

Bookkeeping Service can wear many hats for a small business. Nowadays, bookkeepers use business accounting software to do their work. These are just a few things we think are done for small businesses but in a broader perspective there are other things as well. Let’s take a closer look:

  1. Day to day management of accounts:

A bookkeeper records transactions on a daily basis. They record all purchases and expenses of the business by using software. This way they can easily keep track of cash flow and save their data entry time.

  1. Maintain Up-to-date and accurate records:

A bookkeeper makes sure all your data is up-to-date and accurate.

  1. Keep business aligned with laws:

The US has strict law policies when it comes to accounting. Tax can be a sensitive area. One mistake can end your office door ringing with a letter from the IRS. This is where bookkeepers come into picture. They help align all business accounting activities with US changing laws and regulations.

  1. Keep you prepared for tax:

As we all know tax deadlines and laws are strict. A bookkeeper will make sure your records are accurate, so that you’re always prepared for tax. This keeps the tax man happy and stops you as a small business to pay any fines.

  1. Manage bank feeds:

Bookkeepers manage business transactions through a software. Bank feeds that link the software with your business bank account, allow you to see each transaction in Real-time. For example, a credit card transaction from an airline can be categorized as travel expense. Bookkeepers need to keep an eye on these transactions and make sure this is categorised accurately. Sometimes, they have to manually enter details that aren’t recorded in bank feeds.

  1. Handle Accounts payable:

Bookkeepers usually make payments on behalf of a small business. This includes payment to suppliers, petty cash and expenses. Properly managing the accounts payable is important to ensure good relations with the suppliers.

  1. Send Out invoices and manage Accounts receivables:

Bookkeepers usually prepare invoices and send them to your clients on your behalf so that you receive timely payments. Bookkeepers manage the accounts receivables department as well as chase the delay payments so that the books of accounts are accurate.

  1. Prepare Financial Statements:

Bookkeepers are responsible for preparing financial statements for small businesses. These accounts include balance sheets, profit and loss statements and cash flow statements. Your financial statements should be updated every month.  The profit and loss statements show your business bottom line and operating expenses. The balance sheet shows business assets and liabilities. The cash flow statement shows money flowing IN and OUT of the business. These statements are later shared with the accountant or tax preparer.

  1. Process payroll:

Some bookkeepers are aware of how to process payroll. They can assist small businesses to process paychecks and tax payments to employees. They might also help to manage timesheets for hourly employees or overtime.

  1. Deal with foreign currency transactions:

If a small business has to deal with foreign clients, bookkeepers can assist in that matter too. They make sure to maintain foreign currencies accounts and utilise current exchange rates. This process can be made easier with available digital bookkeeping  software that instantly analyses exchange rates without wasting time.

  1. Perform Stocktake:

For small businesses, bookkeepers also produce inventory reports by counting stock items. If there are any discrepancies, they acknowledge businesses to take faster actions. This is usually carried out at the end of business financial year with the figures featuring in reports in profit and loss statements.

  1. Keep an eye on cash flow:

A bookkeeper will ensure that the business doesn’t run out of day to day money. They do this by keeping an eye on revenues and expenses along with offering advice if the business needs more available cash to operate.

  1. Preparing the books for an accountant:

It is the task of the bookkeeper to make sure the books of accounts are ready to show up to the accountant. This makes things easy for an accountant to use its skills and knowledge in order to  provide any business recommendations, report the board and complete any tax returns.

  1. Reconcile your bank accounts:

The most important task of a bookkeeper is to reconcile the financial accounts. Account reconciliation ensures that the transaction details in your accounting software are the same as those on your bank accounts, credit card reconciliation, and other financial accounts. It is essential to reconcile your financial accounts to avoid overdraft fees, prudent charges, and incorrectly recorded transactions.

Conclusion:

Bookkeeping Services Small Business has an intimate knowledge of your books. They are also good at keeping up with the latest technologies. The main focus of a bookkeeper is to organize, record and report financial transactions. Every small business requires a bookkeeper which is why they play an important role in managing a small business.

Reference URL - https://ledgerbench.hatenablog.com/entry/2020/05/27/201335

Also See: Small Business, Small Businesses, Financial Accounts, Cash Flow, Tax, Small, Financial

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