and why do you need one?
As business owners, our main focus is perfecting the activities of our profession. Unless your profession is bookkeeping, you may not be super familiar with what a bookkeeper does and why it's important. That's what I'm here for.
First off, bookkeepers and accountants do different things - but sometimes a person can be both (like me). Bookkeepers are in charge of the data, accountants use that data to help business owners make decisions. Bookkeeping is black & white. Accounting calls for educated assumptions. Bookkeeping looks back on past data. Accounting focuses on future projections. More on that later, for now we're going to focus on why bookkeepers are so important.
Every business owner has two things in common. Making money & spending money. Bookkeepers keep track of all of that.
Defined:
A bookkeeper is in charge of the financial data for a company. This person records all financial transactions and makes sure the numbers are accurate.
book·keep·er
noun a person whose job is to keep records of the financial affairs of a business
Bookkeepers date back to 2600 BC making it almost the oldest profession. Back then, they were keeping records on slabs of clay! I can only imagine how long that took! Now, bookkeepers use accounting software to keep things efficient and ensure accuracy.
What do bookkeepers actually do?
· Record income and expense transactions (add all transactions to accounting software)
· Reconcile bank accounts, credit cards and liabilities (make sure the numbers are accurate)
· Manage accounts receivable and accounts payable (making sure bills get paid on time and customer pay you on time)
· Collect and remit sales tax to the government (keep you in compliance)
· Keep track of debt and record interest and principal payments (so you know how much you owe and how much you’ve paid in interest)
· Deposit cash in the bank (assist with timely cash flow)
· Provide CPA with accurate information to prepare the tax return (ensure you’re paying the correct amount in taxes)
· Process payroll (get your people paid!)
· Manage receipts (protecting you in an audit)
· Any other data entry tasks needed for your industry
So, why do you need a bookkeeper?
Are you currently doing all of the above tasks yourself?
If no, you should be.
If yes, can you imagine what you could do with that extra time? Where is your time best spent?
Benefits of a bookkeeper:
· More time back in your day
· Pay less in taxes with accurate information
· Know exactly where your money is going
· Know exactly how your money is coming in
· Detailed documentation to protect you in an audit
· Knowledge of the top 3 numbers in your business: revenue, gross profit & net income
· Peace of mind
Shoot, I'd do it for the peace of mind alone.
Want to spend more time growing your business instead of maintaining it?
Want out of the weeds?
Want to work ON your business instead of IN your business?
Hire a bookkeeper.
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