Depending on the industry and company, the description of bookkeeping may vary. However, there are some guidelines and rules that true for any description of a bookkeeper. These rules help truly define what a bookkeeper is, and what exactly they do for a business.
Still, the question remains, what is a bookkeeper?
A bookkeeper’s purpose is to look over, manage, and reconcile the books. This is very important, as it means they must make sure the balance sheets are balancing correctly. They must take into account all liabilities, assets, and more. Normally, this also requires the management of bank feeds. Meanwhile, monitoring them for errors of inflow or outflow funds.
Typical Duties of a Bookkeeper:
- Inventory Management (Not in all cases)
- Recording All Bill Payments
- Tracking the expenses and categorizing them
- All Credit Card and Bank Accounts Reconciled
- Summarizing Financial Details To Owners/Managers Via Reports
- Payable and Receivable Account Management
Why is a Bookkeeper Needed?
It is not unusual for a business owner to handle their own books at first. However, they always fall behind quite quickly. This happens because they are either too busy managing their own business or because of a lack of bookkeeping knowledge. They do have a product/service to provide. They just lack the ability to manage everything at once. If it falls to the owner to balance the books, track every bit of the financial matters of the business, and give the small business the attention it needs, then something is going to suffer. That is why having a bookkeeper handle the financial matters of a business is needed.
A bookkeeper will free up the time the business owner has while adding the bonus of comfort that the books are being managed correctly. Outsourcing to a bookkeeping service can make tax time so much easier. Most experienced bookkeepers often provide additional services; they are able to spot potential growth and trend areas, they have the ability to note the higher than anticipated costs of specific products or services in order for an alternative resolution to be found, and thanks to their experience, they can catch financial concerns and irregularities that many owners wouldn’t notice.
When should a Bookkeeper Be Hired and Not Outsourced?
Typically, small business owners do not hire a bookkeeper. They prefer to contract with a service or freelance bookkeeper on a part-time basis.
Research has revealed that almost 40% of small business owners put in 60+ hours weekly for their businesses. When you take into consideration the value of the time you spend on your business and compare it to the cost of outsourcing to a bookkeeper, you start to realize all the time that you are able to free up. When you start to see the value of your time, and how it could be better used, you will find that hiring a bookkeeping service is quite cost-effective.
So, when is the right time to hire a bookkeeper? When you are ready to spend your time in other aspects of life, or when you just want to manage what time is spent on your business.
However, that is only a couple of answers. There are more.
There is also reason to hire a bookkeeper at the beginning of the business’s life. You would be starting the game with a stacked deck, so to speak. A professional in your corner can not only help you get your financial situation stable when you are starting your business, but it can also contain the potential drains on the cash flow that your business circulates before you can get ahead. Another invaluable reason to hire a bookkeeper, in the beginning, is tax season, or whenever it is time to see how much of a success your business is.
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