What Does a Bookkeeper Do, According 6 Bookkeeping Experts

What are the primary responsibilities of a bookkeeper?

We asked 6 bookkeepers to shed light on this question.

Tiffany Powell, MA, EA

Tiffany Powell

Owner, Sapphire Bookkeeping & Accounting, Inc.

  • Enter financial transactions that occurred during the month.
  • Reconcile bank activity for what cleared and what didn’t.
  • Review financials and missing activity and investigate items that are incorrect.

With so many systems that auto-enter bank activity, bookkeepers have to be the eyes that see what everything means and verify where everything is being entered in order to make corrections so that financials show the correct information.

Related: What Do Accountants Do?

Ben Watson, CPA

Ben Watson

CFO, Dollar Sprout | Founder, Fiscal Fluency

A bookkeeper helps keep your business’ financial information organized

It is important for you to see where money has come and gone from your business dealings. They categorize transactions so the basic financial statements can be produced and give you a clear picture of where the business stands financially.

Often, bookkeepers can help manage funds by paying invoices and remitting taxes by their due dates to avoid any annoying penalties and fines. Many times, a good bookkeeper will be your lifeline in case of an audit or tax inquiry.

Eulica Kimber CPA, MBA

Eulica Kimber

Certified Public Accountant | Founder, Plan2Pro$per Small Business Academy

A bookkeeper is responsible to document the day to day transactions of a business

Bookkeeping should take place all year long; not just a year-end or when the tax return is due. So a good bookkeeper should be “all up in your business!” They should be bugging you for receipts and asking questions about transactions so they can record it to the right line of accounting in the correct period.

A good bookkeeper is also good at creating systems for the worker bee

They may create forms and processes to assist in collecting transactional information completely and accurately. They are the reason you have to complete that form and attach that receipt 3 days after returning from your business trip! If people are excited to get a call from you, you may not be a good bookkeeper.

Tim Chaves

Tim Chaves

CEO, ZipBooks

In a less official definition, here are some things that I would say bookkeepers do:

  • Empower executives to make data-driven decisions.
  • They make sure that the foundational stones of your business are in place, so you’re always prepared for financial earthquakes.
  • They are the emotional security blanket shielding you from financial ruin.

Justin Carpenter

Justin Carpenter

Accounting Manager, Gurian CPA

A bookkeeper keeps your financial books

Their main responsibility is to accurately record transactions such as; accounts receivable, accounts payable, inventory and sometimes payroll. They can take the information they’ve recorded and provided your business with reporting on a monthly, quarterly or annual basis. You might think that is all your business might need.

However, there are certain tasks that a bookkeeper can’t do, such as analyze the reports and provide tax advice, which is essential to your business growth.

Bookkeepers are still helpful for your business because they handle the recording aspect of your business transactions, which is the first step in the accounting process.

Jessica Musa

Jessica Musa

Founder & CEO, Virtually Productive

A bookkeeper is a gatekeeper to a business (or an individual’s) finances

Typically, there is a software program such as QuickBooks that tracks all transactions.

A bookkeeper categorizes each transaction and reconciles the accounting software to the bank account at the end of every month to check for discrepancies.

Keeping the transactions categorized and consistently up to date allows a business owner to see a snapshot of their financial health at any time. Many small business owners are not even aware that they should be monitoring certain reports consistently.

With a click of a few buttons, a bookkeeper can produce important reports such as profit & loss statements, balance sheets, cash flow, and accounts receivable aging reports.

Depending on the size of the organization, bookkeepers may also process payroll, handle all business invoicing and collections and pay all invoices.

Frequently Asked Questions

What is the difference between a bookkeeper and an accountant?

A bookkeeper and an accountant are both financial professionals, but they have different roles and responsibilities in managing a company’s finances.

A bookkeeper records financial transactions, maintains accurate financial records, and prepares financial reports. They focus on day-to-day financial transactions, such as recording sales and purchases, reconciling bank statements, and managing accounts payable and receivable.

An accountant, on the other hand, is responsible for analyzing financial data, preparing financial statements, and providing strategic financial advice to help businesses make better decisions.

They focus on interpreting financial data and use this information to provide insight into the financial health of a business.

In terms of education and qualifications, bookkeepers do not need a college degree, while accountants typically have at least a bachelor’s degree in accounting or a related field.

In addition, accountants may hold professional certifications, such as Certified Public Accountant (CPA), that require additional education, training, and experience.

Depending on the size and complexity of your business, you may need both a bookkeeper and an accountant to effectively manage your finances.

How can business owners work effectively with bookkeepers?

Providing accurate and complete financial information: Business owners should give bookkeepers accurate and complete financial information to ensure that financial records are accurate.

Communicating regularly: Business owners should communicate regularly with bookkeepers to ensure they have the information they need to do their jobs effectively.

Provide feedback: Business owners should provide feedback to bookkeepers on their performance and the quality of their work.

Be transparent: Business owners should be transparent with bookkeepers about their company’s financial situation and any challenges they face.

Seek advice: Business owners should seek advice from bookkeepers on financial matters to make informed decisions.

How often should I meet with my bookkeeper?

The frequency with which you should meet with your bookkeeper can depend on many factors, such as the size of your business, the complexity of your financial transactions, and the amount of time and resources you have available.

In general, it is recommended that you meet with your bookkeeper at least once a month to review your financial records and discuss any issues or concerns.

Regular meetings with your bookkeeper can have several benefits, such as:

– Identifying and correcting errors or discrepancies in your financial records.
– Review your financial statements and identify trends or areas for improvement.
– Discussing financial strategies and goals for your business.
Staying up to date on changes in accounting regulations and tax laws.
– Building a strong relationship with your bookkeeper and fostering effective communication.

If you have a larger business or complex financial transactions, you may need to meet with your bookkeeper more frequently, such as weekly or bi-weekly. 

On the other hand, if you have a smaller business with simpler financial transactions, you may only need to meet with your bookkeeper quarterly. You should discuss your specific needs with your bookkeeper to determine the best schedule for your business.

What are the most common misconceptions about bookkeeping?

Bookkeeping is just data entry: While bookkeepers do record financial transactions, their job is much more complex than simple data entry. They must also understand financial statements, reconcile accounts, and analyze financial data.

Bookkeepers are the same as accountants: While there is some overlap between the two professions, bookkeepers generally focus on recording financial transactions and keeping accurate records, while accountants focus on analyzing financial data and providing strategic advice.

Bookkeeping is a low-paying profession: While bookkeepers may start at lower salaries, experienced bookkeepers can earn competitive salaries and even advance to higher finance positions.

Bookkeeping is a dying profession: As long as there are businesses and financial transactions, bookkeepers will need to keep track of those transactions and maintain accurate financial records.

What are some bookkeeping ethics and standards?

Bookkeepers are held to ethical and professional standards to ensure that financial records are accurate and trustworthy. Some bookkeeping ethics and standards include, but are not limited to:

Confidentiality: Bookkeepers must maintain the confidentiality of financial information and ensure that it is not disclosed to unauthorized parties.

Objectivity: Bookkeepers must record financial transactions and report financial data objectively.

Competence: Bookkeepers must have the necessary skills and knowledge to do their jobs effectively and maintain accurate financial records.

Integrity: Bookkeepers must be honest and transparent in their work and avoid conflicts of interest.

Professionalism: Bookkeepers must be professional and observe professional standards and ethics.

How do I know if my bookkeeper is doing a good job?

As a business owner, you must ensure your bookkeeper is doing a good job by keeping accurate financial records and making sound financial decisions.

Here are some ways to determine if your bookkeeper is doing a good job:

– Your bookkeeper maintains accurate and orderly financial records.
– Your bookkeeper provides timely and accurate financial reports that are easy to understand.
– Your bookkeeper reconciles accounts regularly to ensure accurate financial records.
– Your bookkeeper complies with accounting regulations and tax laws.
– Your bookkeeper communicates effectively and responds to your questions and concerns in a timely manner.
– Your bookkeeper provides recommendations for financial improvements and strategies.
– Your bookkeeper is professional and maintains confidentiality when handling financial information.

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