What Does a Bookkeeper Do and How Do They Benefit Your Small Business?
You've made mistakes managing your personal finances. We all have. Maybe you brought your checking account to a negative balance after forgetting about a payment that was scheduled over a week ago. Maybe you've simply miscalculated the interest on your credit card.
Whatever your mishaps may have been, imagine them being in your business accounts. When you are the owner of a small business, you are already performing a ton of roles. Should you be the bookkeeper too?
It's twice as easy to make an error with your business expenses when you have tons of transactions coming in from customers and bills you're paying to suppliers and other professionals.
A bookkeeper will help you maintain your sanity and your accounts. Think bookkeeping is just a simple data entry job?
There's more to it. Keep reading and we'll tell you everything you need to know.
What Does a Bookkeeper Do?
When you hire a bookkeeper, you're hiring a person who can handle a plethora of tasks. One of the best benefits of having a bookkeeper on your staff is a seasoned bookkeeper knows how to change their duties based on the needs of your business.
Because of this, there isn't a straight answer as to what a bookkeeper does. There are, however, some core responsibilities of a person in this role.
These responsibilities include:
- Payroll management
- Assist with preparing taxes
- Paying bills and invoicing
- Track and minimize unnecessary spending
- Oversee bank and credit accounts
- Generate financial forecasts
- Assist with creating wealth and making investments
How Can a Bookkeeper Help Your Business?
So, we've discussed some of the core responsibilities of a bookkeeper, but some of these services can sound confusing. Here we will break down the ways a professional bookkeeper can help benefit the growth of your small business.
This sounds simple enough, right? It isn't. Your daily transactions include money coming in from sales and money going out for all the bills that help you maintain your business.
More importantly, understanding and correcting bank feeds also fall into this category. Take it from us, bank feeds aren't always easy to decipher and work with.
Financial forecasting became a necessity for business owners after The Great Depression. It involves predicting the amount of money your business will generate and the amount it will need to spend to stay afloat.
Forecasting can include your marketing budget, the costs of hiring or promoting employees, holiday discounts, and funds spent on inventory to name a few.
As a business owner, you should be doing everything you can to save money while also providing quality to your customer base. These two things often negatively impact one another.
This is where you bookkeeper comes in. Any bookkeeper worth their salt will look over your finances with a fine tooth comb and show you where you can cut costs.
They will track unnecessary spending, prevent expensive mistakes, and help maximize your tax return. Additionally, they can show you places where you can earn more.
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Sure, you're great at what you do. You used your skills and resources to start a lucrative business from the ground up.
But unless you have a background in finances and accounting, you should hire a bookkeeper to manage those complex issues that you might not understand. Plus, this makes one less hat you have to wear.
Allow yourself to focus more on the things that count: your customers. Follow our blog for more business advice.