What Does a Bookkeeper Do for a Small Business? A Lot, It Seems!
A small business bookkeeper is a person who deals with the details of the bookkeeping for a small business.
The small business bookkeeper is responsible for reconciling the books, creating financial reports for management, maintaining the books for business owners, and performing the other tasks related to keeping the books.
In some cases, a small business will employ both a bookkeeper and a bookkeeper assistant.
10 Common things Bookkeepers Do For Small Businesses
Daily Accounts Management
Bookkeepers keep track of all the financial transactions that occur in a business over a period of time in order to provide accurate day-to-day management of the accounts.
This information is then used to create financial statements, disclosures, and financial management planning in larger businesses.
For smaller businesses, bookkeeping can often be seen as a stopgap for the day-to-day information they accumulate.
Maintain Up-to-Date and Accurate Records
A bookkeeper is responsible for managing and keeping updated the financial records of a company. This includes all transactions, invoices, payments, and so on.
They are often required to communicate with colleagues and clients to ensure that all information is up-to-date and accurate.
Keep You Prepared For Tax
Bookkeeping is a service that bookkeepers offer to small businesses. It can help you communicate with your certified public accountant or enrolled agent, gather information needed for tax filings, and keep track of your business finances.
Additionally, bookkeeping includes tasks such as sending invoices, processing payroll and monitoring cash flow.
Manage Bank Feeds
Bank feeds are a great way to keep track of your business finances in real-time. By linking up your accounting software with your business bank account, you can see each and every transaction as it happens.
The software should be able to automatically categorise certain transactions, but bookkeepers still need to keep an eye on things to make sure everything is being categorised correctly.
If there are any transactions that the software misses, the bookkeeper might have to add them manually.
Handle Payable Accounts
Accounts payable is the process of ensuring that a business pays its suppliers on time. This means keeping track of when payments are due, taking advantage of early payment discounts, and submitting payments to the vendor. Maintaining positive trade credit terms with suppliers is important for any business, so managing your accounts payable is important.
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Prepare Financial Statements
A bookkeeper prepares three financial statements for a business on a monthly and yearly basis. The profit and loss statement shows how much money the company has earned and lost over a period of time.
The balance sheet is a snapshot of the company’s assets, liabilities, and owner’s equity at a specific point in time. The cash flow statement tracks cash movement in and out of business over time.
Bookkeepers use accounting software to prepare these statements. This software allows bookkeepers to share reports with accountants and tax preparers to help them with tax preparation or better understand the company’s financial situation.
Payroll Processing
Businesses need to process payroll in order to pay their employees. This can be done with the help of a bookkeeper.
Bookkeepers can either have a payroll offering or simply input payroll data into your accounting system after your payroll service provider has submitted reports to you. How you set up and manage payroll will depend on which software you choose.
Some bookkeeping services include other day-to-day management tasks such as maintaining up-to-date records, keeping businesses aligned with laws, sending out invoices, and managing accounts receivable.
Cash Flow Checking
Bookkeeping is essential for small businesses to keep track of their day-to-day money. These include tracking every sale and purchase, and using software to do it all.
This saves plenty of time data entry. Bookkeeping also includes preparing invoices, chasing payments, getting ready for tax deadlines, processing payroll, etc.
Preparing the Books For an Accountant
When preparing the books for an accountant, a bookkeeper will generally provide the accountant with a trial balance.
The trial balance is a consolidation of all the general ledger accounts. The accountant uses it to derive things like the Balance Sheet, Income Statement, Profit and Loss Statement (P& L), and Statement of Cash Flows.
The P&L shows how much profit or loss has been made over a specific period of time.
Conclusion
For small businesses with multiple staff members, the bookkeeper’s life is hectic. The bookkeeper is almost certain to be balancing the books of a wide range of companies as they are busy collecting invoices and processing receipts.
I hope this blog post has been helpful. You can visit our bookkeeping service to learn more about small business bookkeeping or let our team know if you require a small business bookkeeper.
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