A Bookkeeper is someone who has the knowledge and understanding of how to record the daily financial transactions of a business. In many cases, a Bookkeeper can prepare Financial Statements for a bank or tax preparer. As a business owner, you are responsible to keep accurate financial records. Many entrepreneurs and small business owners tend to do their own record keeping because they think that they are saving themselves money by doing it themselves. This may be necessary in the beginning but as you grow hiring a bookkeeper can save a business owner many headaches. The larger you get, the more staff you may need for accounting purposes. Large Corporations, have a team of financial people to help them because they recognize how valuable having a team of trained financial staff is.
Today, I am speaking to the small business owner, who thinks they can do it themselves, Here is what a Bookkeeper can do for you:
- Record financial transactions such as sales, purchases, record customer receipts and make payments to vendors.
- Maintain ledgers – maintain accurate and up to date records which is important for government agencies like the IRS and for any potential lending agencies.
- Reconcile Bank Statements – sadly many small business owners are so far behind in this area that it is scary. Cash is one of the most important assets your business has, especially when you are a start-up.
- Manage Accounts Payable and Accounts Receivable – knowing how much money you owe and how much money you have coming in is critical to stay in business. As a business owner do you want to spend your time paying bills and trying to collect money from customers or would you rather spend your time actually getting new customers into your business?
- Prepare Financial Reports – Your Balance Sheet, Income Statement and Cash Flow report is crucial information on determining the health of your company, not only for yourself but if you have investors or want a bank loan you will be required to have these reports available on a regular basis.
- Bookkeepers can review financial records for accuracy and fix errors and make sure there aren’t any discrepancies.
- Bookkeepers may also provide payroll service.
- Bookkeepers use financial software like QuickBooks to provide services efficiently and accurately.
Most Bookkeepers do the daily financial transactions and provide the financial reports to an Accountant for interpretation or for tax services. Some Bookkeepers, like myself, have been trained and worked in the Accounting field for many years and can provide analytical and CFO type services.
If you are still wondering why you would need a Bookkeeper because you can do it yourself, I want you to ask yourself what your time is worth. Hiring a Bookkeeper provides you peace of mind because it does the following:
- Provides Efficiency and Saves Time: Business owners juggle multiple responsibilities and bookkeeping can be time-consuming. Outsourcing or hiring a bookkeeper frees up valuable time, allowing business owners to focus on core activities like business development and customer service.
- Reduces Stress and Provides Peace of Mind: Tax season (need I say more?) can be stressful. A bookkeeper ensures that records are organized and accurate throughout the year, reducing stress during tax time and giving business owners peace of mind.
- Ensures Compliance with Tax Regulations: Bookkeepers ensure that financial records are accurate and prepared for tax reporting purposes, helping businesses comply with tax laws and avoid penalties..
- Improves Financial Decision-Making: Accurate and up-to-date financial records are crucial for making informed business decisions. Bookkeepers generate reports like income statements and balance sheets which provide insights into a company’s financial health allowing business owners to assess profitability, identify trends, and make strategic decisions for growth and improvement. You need to know where you are to make informed decisions to get you where you want to go.
- Provides Better Cash Flow Management: By tracking income and expenses, Bookkeepers help businesses better manage their cash flow. They can identify potential issues and help ensure that there are sufficient funds to meet obligations.
- Preparation for Audits and Financing: Good bookkeeping ensures that businesses are prepared in case of an audit and have the necessary documentation to secure loans or other financing, which can be crucial for business growth and operations.
To discover how Lila MacDowell Bookkeeping can help your business:
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