Small businesses must make a consistent income. However, because they also need to spend money on supplies, they often pay more than they earn. Therefore, bookkeeping is essential. You could hire an accountant to do your bookkeeping or use services provided in an institution like the one described in more than accountants review to do your bookkeeping for you. Most bookkeepers are also responsible for business strategies, like getting a domain name. A domain name is your business’s brand, and though choosing one is hard, companies like those described in euro DNS reviews can help you choose the best domain name for your business.
What are bookkeepers and their responsibilities?
Bookkeepers provide accurate and up-to-date information about a business’s finances. Their reports usually go to the business owners and managers, which helps them make decisions. Some bookkeepers are also involved in strategy development. Bookkeepers may also share jobs with accountants, like preparations for annual financial reports and tax returns. A bookkeeper’s main or core duties include data entry, bank reconciliation, and drawing up monthly reports. Some bookkeepers may also be tasked with creating and sending invoices and ensuring they are getting paid, checking the accuracy of invoices from suppliers and ensuring they are paid on time, and calculating pay and deductions needed on employees’ payroll. There are also advanced duties that some bookkeepers take on, like tax filing, end-of-year reporting, business strategy, training, providing a full-service virtual office, and acting on behalf of the client with tax authorities.
How can bookkeepers help your business?
Small business owners juggle many tasks, from keeping their store running to generating an income, keeping customers happy and looking after their financial information. Therefore it would be ideal to hire a bookkeeper as they can help free up time in your schedule to build your vision, boost your bottom line and polish your workflow. In addition, a professional bookkeeper can ensure you generate a more accurate financial report and data. Some also help break down complex tax codes for small businesses, and having solid bookkeeping records on hand can be beneficial if your business gets audited.
Bookkeepers vs Accountants.
Although bookkeeper and accountant work often overlap, bookkeeping is more to do with transactional and administration concerning the recording of financial transactions. While accounting is more subjective, as accountants usually just give you insight into the business’s financial health based on the bookkeeping records. Key differences between bookkeeping and accounting:
- Bookkeepers record and categorise daily payments and expenses; comparatively, accountants are tasked with preparing to adjust entries.
- Bookkeepers sendcustomer invoices and record the payments received; meanwhile, accountants analyse the cost of operations.
- Bookkeepers conduct bank reconciliations monthly, while accountants advise business owners during financial decision-making.
- Bookkeepers generate monthly financial statements, while accountants review and analyse financial statements.
- Bookkeepers process payroll; however, accountants assess financial health and make economic predictions.
- Bookkeepers prepare books for the accountant, and accountants subsequently perform the audits.
- Bookkeepers provide the business’s year-end financial and tax documents to the accountant, as the accountant subsequently files tax returns, conducts tax planning and provides tax advice to the owner(s) or manager(s) of small businesses.
Although hiring a professional bookkeeper sounds like an unnecessary expense for your small business, they save you more money than if you had done it yourself. In addition, because most bookkeepers have more experience handling finances than everyday business owners, they are less prone to make small human errors.