What does a bookkeeper do?
Staying up to date on your company’s financials and keeping a close eye on cash flow are some of the most crucial tasks in any small business. However, what seem like small tasks often stand in the way of business owners realizing their full potential! Too often, business owners neglect their books either because they don’t have time or because they’re simply confused by their accounting software. That’s where having a bookkeeper comes in!
What does a bookkeeper do, exactly?
A bookkeeping professional is a person who supports a company’s financial operations by keeping track of their accounts and transactions, generating key financial reports, and performing account reconciliations. With an upgraded package, a bookkeeper may also go beyond these basic tasks, providing key updates and insights to the business owner in order to help improve and grow their business. More advanced bookkeepers, like the ones here at Accounting Benefit Solutions, might also provide some additional or industry specific services, like cash flow forecasting or KPI analysis, that can help business owners grow their business faster and more efficiently. Keep in mind that these are additional services that are not included in the basic bookkeeping package here at Accounting Benefit Solutions. If you’re a current client and want to add this service, let us know!
To help you better understand, let’s start at the most basic level. What is bookkeeping?
Bookkeeping is the practice of recording, classifying, and reconciling the financial transactions of a business against their bank and credit card statements. The goal is to ensure that every transaction your business has made is accurately reflected in your bookkeeping records and categorized appropriately. Though many see bookkeeping as a compulsory task for tax compliance, we know it is worth so much more than that! Once the basics have been completed, you can actually use this data in many different ways to help drive your business forward. More on that soon!
Why hire a bookkeeper if I can do all this data entry myself?
Good question! Bookkeeping can seem simple when you think about it as described above, but the truth is, keeping good track of your books is a lot more complicated than you might think. Your books must be recorded accurately to maintain compliance and use it for advanced purposes. That means that if things aren’t done properly, you could end up paying thousands in clean up fees during tax season or using data to inform your decisions that don't accurately reflect your company’s financial situation. Even if you did keep great track of your books, having a professional bookkeeper who can help you read between the lines on your ledger is the best way to use this data to actually grow your business.
When you work with a qualified bookkeeper, we go way beyond the basic data entry and help you decipher what your financial reports actually mean. We generate your profit and loss statement, your cash flow statement, and your balance sheet on a regular basis and review it alongside you to help you understand financial trends. We also help you strategize your next moves based on the financial data we collect, improving your performance overall.
How to Get Small Business Financial Data to Benefit Your Business
If you’ve DIY’ed your bookkeeping until now or haven’t really understood what your financial reports mean, you might be wondering: how do these reports actually help me grow my business? We’re glad you asked!! When we generate these reports for our clients, we help them understand things like how their profits are being made, how well their cash flow is performing, and how business debt is impacting their company. We also answer any questions and provide strategies to improve.
For example, if we notice that a client is struggling with cash flow and that many of their customers or clients are paying them late, we can suggest a new invoicing process that can help with that. Alternatively, we might even suggest a different payment processor so that payments arrive in our clients’ bank accounts faster. There are so many ways to use this data to help small business owners operate more efficiently!
How to Make the Most Out of Your Small Business Financial Data
Using your financial data to streamline business decision making and understand more about your financial performance is a fantastic step toward a more profitable and efficient business! If you need support from a qualified financial professional, we encourage you to reach out!