A bookkeeper works with you on your day-to-day company bookkeeping needs. Depending on your company size, your budget, and your preferences, you may have a full-time employee, or you may outsource it to a bookkeeping or accounting firm. Or you may still be handling it yourself!
With that in mind, here are some of a Bookkeeper’s services:
Categorizing Expenses
This is data entry of all your expenses and income, and is kept up on a daily, weekly, or monthly basis, depending on your business size. Modern bookkeeping software takes a lot of the heavy lifting out of it and even allows you to automate aspects of it. You should be able to connect your bank accounts and credit cards to your bookkeeping software, allowing it to pull in transactions automatically.
Managing Receipts
One service your bookkeeper may provide is managing your receipts. Although receipts may not seem very significant, it is very important that you store your receipts. Fortunately, there are several apps available that help you scan and store them electronically, so you don’t have to keep them in a file drawer somewhere. Your bookkeeper will be able to help set this up for you so you are able to scan receipts on the go. No more stuffing them in a shoe box!
Receiving Payments
If you send out invoices in your business, it’s important to ensure that any payments received are matched up to the correct invoice. If a payment is not matched to its invoice, not only will you think your customer still owes you money, but it will show up as double income on the books.
Entering Bills and Paying Vendors
Another important part of your business is paying your bills! If you forget to pay your bills, not only does that upset and hurt other business owners and your reputation, but it might result in vital services for your business getting shut off. Your bookkeeper may be able to help with entering your bills, tracking which need to be paid, and can even help with the payments. There are software programs available that can help you set up workflows, along with approvals, so no money is ever spent without you knowing and approving it.
Reconciliation of Your Bank Accounts
Monthly reconciliation consists of going through the bank statements for each of your cash and credit card accounts and comparing each transaction to what is on the books for your business. Not only does this help catch any potential fraud, but it helps make sure there are no errors on your bookkeeping records.
Assisted Payroll
As a small business owner, you have to make sure your employees get paid, and on time! Not only do you need to have the funds available to pay, but someone has to make sure that the employees are paid on time and that the correct taxes are accounted for and filed. Your bookkeeper can work with you using a third-party software such as Gusto or Patriot, to help you out with this.
Providing Financial Statements
One of the most important parts of your bookkeeping is your financial statements. All of the data entered into the accounting software will help run the three main reports that one should look over monthly: the Balance Sheet, the Income Statement and the Statement of Cash Flows. Your bookkeeper should be providing these reports to you monthly and going over them to help with any questions. As they are on the ground every day keeping up your books, they will probably have an excellent idea of what is going on with your business. Any time spent going over your financial statements is well worth it and can help you make the correct business decisions.
Budgeting and Cash Flow Forecasting
One of the biggest reasons a small business fails is a lack of cash flow. Depending on the study you read, there are reports that up to 82 percent of small businesses fail because of a lack of cash flow. So what can you do about it? Well, one possibility would be to have a plan and to execute it. Your bookkeeper may be able to help you with creating a budget for your business, as well as a plan for where your cash is going to come from for the upcoming week or month.
As a side note, it would also be a good idea to have a “rainy day” or emergency fund for your business, in case you do have a down month or two. It might sound daunting to be trying to have an emergency fund when you can barely meet your expenses, but one good way would be to start with saving 10 percent of your income and setting it aside for your emergency fund.
While this isn’t a complete list of all the valuable tasks a bookkeeper does, these are some of the main ones. Regardless of how big your business is, it’s important that all tasks are done correctly and that proper systems are in place.
Do you have any questions, comments or feedback? Email us at contact@lucrativebookkeeping.com.
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