What Does a Bookkeeper Actually Do?
If all your mental powers have been focused on getting your business off the ground, you might not fully understand what a bookkeeper does.
"Your bookkeeper isn’t just consulting an accounting book and doing simple data entry—there’s so much more that goes into bookkeeping than many small business owners realize."
A bookkeeper is someone who produces financial records for businesses or organizations. They record financial transactions, update statements, and check financial records for accuracy. Bookkeepers are employed in many industries, including firms that provide accounting, tax preparation, bookkeeping, and payroll services. Bookkeepers have been around as far back as 2600 BC—when records were tracked with a stylus on slabs of clay—making bookkeeping not the oldest profession, but pretty close.
Maintaining financial records is often a time-consuming task because it requires extreme accuracy across every single financial transaction. Bookkeepers must maintain and balance financial records daily, including transactions from coworkers. It can be difficult to record those daily transactions without strong communication.
As organizations continue to computerize their financial records, many bookkeepers use specialized accounting software, spreadsheets, and databases. Most clerks now enter information from receipts or bills into computers, and the information is then stored electronically. They must be comfortable using computers to record and calculate data. The widespread use of computers also has enabled bookkeepers to take on additional responsibilities, such as payroll, billing, purchasing (buying), and keeping track of overdue bills. Many of these functions require bookkeepers to communicate with clients.
Just like any other field of work, bookkeeping can look different from business to business. However, these are the most common tasks that bookkeepers tends to tackle:
Record financial transactions
Reconcile bank accounts
Manage bank feeds
Handle accounts receivable
Handle accounts payable
Prepare financial statements
It helps to think of a bookkeeper as the chef who prepares the meal. The bookkeeper prepares the books and makes accurate financial records available. The accountant is like the food critic. The accountant will dig deeper into the financial records and analyze the business’s finances. An accountant can advise you on ways to conserve costs and increase profits and help you understand the financial impact of business decisions.
At the end of the day, will ultimately depend on what you and your small business need from your bookkeeper. Either way, having a bookkeeper keeping track of your small business’s finances will free up the time and energy you need for growing your business.
CDO is a bookkeeping service that balances your books on a monthly basis. We
reconcile transactions, prepare financial statements, and provide you with a year-end financial package to make tax filing easy. Will also work directly with your tax professional. If you want to keep better books, we can give you a free consultation, click here