While you may think of a bookkeeper as one who just “keeps the books,” their job description usually consists of a lot more than just that. Here’s a look at some of the tasks a bookkeeper may perform for your business:
Keeping the General Ledger
The most basic function a bookkeeper performs is recording transactions, known as journal entries, in your general ledger. This is typically done using double-entry bookkeeping, where every debit transaction has a corresponding credit. Today, most bookkeepers use accounting software such as QuickBooks to keep track of transactions.
Reconciling Your Statements
In addition to recording all your transactions, bookkeepers ensure accuracy and help prevent fraud or errors by reconciling your bank and credit card statements. This is done by matching transactions on your statements against what’s been recorded. If there are any discrepancies, bookkeepers will help determine where the error is coming from.
Preparing Financial Statements
Since bookkeepers keep track of all your transactions, many of them can prepare financial statements for your business. The most common ones are the income statement (also known as a profit & loss), the balance sheet, and the cash flow statement.
Managing Accounts Payable and Accounts Receivable
A bookkeeper may also pay the bills and collect payments from customers and clients, known as accounts payable and accounts receivable. This will help your business maintain a good working relationship with your vendors and ensure all bills and invoices have been paid on time.
Tax Reporting
As a business, there are many different taxes you need to collect and report. Such as:
Federal Quarterly Estimated Tax Payments
Bookkeepers can help you keep track of tax deadlines, withhold taxes, and remit and report them to the collecting agency.
Payroll Processing
Some bookkeepers also offer payroll services such as payroll processing and payroll tax reporting. Tasks include tracking employee hours and benefits, writing paychecks and scheduling direct deposits, and sending payroll tax payments and reports.
Bookkeeper vs. Accountant
Lastly, we would like to clarify the difference between a bookkeeper and an accountant since many of them perform similar tasks.
Bookkeeping typically consists of your day-to-day finances and focuses on organizing, categorizing, and recording your transactions. They also ensure that your records are accurate and complete.
Meanwhile, an accountant takes the records prepared by a bookkeeper and analyzes them to help you understand the financial situation of your business. One of the main functions of an accountant is preparing and filing business taxes using records provided by your bookkeeper. These two professionals usually work together to help you maintain a financially stable and successful business.
At Summit Bookkeeping, our bookkeepers are trained in a wide variety of tasks, including all of the ones stated above. We can also assist in HR and marketing needs for your small business. If you’d like to talk about what services would be best for you, please feel free to contact us or give us a call at (360) 756-5020.