What does a bookkeeper do?
A bookkeeper’s duties can vary depending on the organization they work with. A modern bookkeeper’s duties might be quite diverse. They are responsible for providing accurate, up-to-date financial information about a business. Most often, their reports go to the business owners and managers to help them make decisions. Some bookkeepers are often involved in strategy development as well. OrangeIQ will tell you everything about what does a bookkeeper do.
The two basic tasks in bookkeeping are data entry and bank reconciliation. Without these, all the other tasks fall over.
What do bookkeeping services include?
A bookkeeper has many different skills that they can use for the betterment of an organization. These services include:
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Data Entry
This is the foundation of everything else in bookkeeping and accounting. Data Entry is the process of recording financial transactions like money coming into or going out of the business.
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Bank Reconciliation
It is a way to check and do quality control on the books. When a transaction is recorded against your bank’s, you are doing bank reconciliation as your entries must match their records.
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Monthly Reports
There are dozens of financial and accounting reports that one could create. There are a few that bookkeepers like to check every month or two to make sure the business is performing steadily.
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Liaison
It includes meeting with the accountants on behalf of their clients to discuss the financials and tax-related queries.
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Payroll
Payroll involves calculating employee pay, deducting things like tax and retirement contributions, then distributing money to all the right people before the given dates. One also has to show all the workings to the government, so they can make sure that everything is done correctly.
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Account Receivables and Payables
Receivables usually involve invoicing the customers and tracking payments of these invoices and often following up on overdue payments. While Payables involve things like debts, paying bills on time without running the bank balance too low, etc.
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Tax Filing
Taxes can be tricky as there are lots of deadlines to make and even more rules to follow. The bookkeepers handle this, so business owners do not have to. There are generally three types of tax returns: Sales Tax, Income Tax, and Payroll Tax.
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Training
Any organization is constantly upgrading its technology, and the employees always need to be trained to keep up with it. A bookkeeper trains the staff on best bookkeeping practices as well as the use of software solutions.
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Business Strategy
They advise on important business decisions sometimes as well as create budgets and forecasts. They advise on how to improve the business.
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Business Process
They have to review, research and implement the software solutions and internal controls to enhance the business performance.
What are the different types of Bookkeepers?
Bookkeepers serve a wide range of functions, from standard data entry to advising business strategy. They can come from all walks of life. Below are some of the types of bookkeepers that keep the businesses running.
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Unofficial “kitchen table” bookkeeper
This can be a small business owner, their spouse, partner or family member. It may even be someone with another role in the business who ends up working on the accounts by default. They do the basic tasks like data entry, bank reconciliation, invoicing payments, and filing the paperwork for the accountant. They are likely to be self-taught.
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Sole proprietor
This is a one-person bookkeeping firm. They may have started out as a kitchen table bookkeeper and loved it, or maybe they left a big firm. It is likely for them to have some training and certification. They set up their business and take on a few clients of their own. These can be referrals from friends, colleagues, and other people who’ve heard they are bookkeeping.
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Bookkeeping practice
Bookkeeping firms are similar to accounting firms. They often sell off-the-shelf service packages ranging from basic bookkeeping, all the way to strategic advice.
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Department in an accountancy firm
Some accounting firms have a bookkeeping department that keeps your accounts up to date and produces monthly reports. These people may often be called “Accounting Technicians.”
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Full-charge bookkeeper
These types of bookkeepers work in a business doing the full spectrum of bookkeeping duties. They often report directly to the owner or management. They may work with an external accountant to deliver all of the business’s accounting needs.
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Virtual bookkeeper
Virtual bookkeepers deliver their service remotely by using online accounting software and meeting mostly via video conference. Doing business this way allows them to keep their prices down. They might be a sole proprietor, inside a practice, or be based offshore as an outsourced service.
What is the difference between accounting and bookkeeping?
Bookkeeping is a transactional and administrative role that handles the day-to-day task of recording financial transactions. This includes purchases, receipts, sales, and payments. Meanwhile, Accounting is more subjective, providing business owners with financial insights based on information taken from their bookkeeping data. Bookkeeping generates data about the activities of an organization while Accounting is designed to turn data into information.
The key takeaway is bookkeepers handle the day-to-day tasks of recording financial transactions. Accountants, on the other hand, provide insight and analysis of that data.
