eGomezCPA-logo-cpa-miami

What Does A Bookkeeper Do?

What Does A Bookkeeper Do

Are you a small business owner looking to understand the roles and responsibilities of a bookkeeper before you hire one? In this post, we will take you through the world of bookkeeping and explore how it can benefit your business. From routine financial tasks to customized solutions, we will cover everything you need to know, so you never need not need to again ask “what does a bookkeeper do?”

In short, bookkeeping is the process of recording and organizing financial transactions. It is a critical aspect of running any business, as it provides a clear picture of the company’s financial health. As professional Miami bookkeepers, EGomezCPA can help you make informed decisions, manage cash flow, and plan for your future. Let’s take a look into this further so you can understand why these activities are so important.

A Bookkeeper's Roles and Responsibilities

A bookkeeper’s role is to maintain accurate financial records for a business. This will include recording financial transactions, reconciling accounts, and generating financial reports. 

They are also responsible for managing accounts payable and accounts receivable, processing payroll, and ensuring that the company complies with tax laws and regulations.

Some of the primary roles and responsibilities include:

Recording Financial Transactions: At the core of bookkeeping is the duty of recording daily financial transactions. This can include things like sales transactions, purchases, income, and expenses. Each of these transactions will need to be documented meticulously for future reference and financial analysis.

Reconciling Accounts: A bookkeeper will check and validate the company’s accounts against bank and credit card statements, making sure there are no discrepancies. This reconciliation process is important to make sure all transactions are accounted for, and the business’s financial data is accurate.

Generating Financial Reports: Monthly financial reports such as balance sheets, profit and loss statements, and cash flow statements, are typically prepared by a bookkeeper. 

Managing Accounts Payable and Receivable: Keeping track of what your business owes (payable) and what is owed to your business (receivables) is important. A bookkeeper will monitor outstanding invoices, ensure timely payments, and follow up on overdue accounts.

Processing Payroll: For many businesses, payroll can be a complex process. A bookkeeper will make sure that employees are paid accurately and on time. They also handle other related tasks such as tax withholdings, benefits deductions, and any occasional bonuses or commissions that are paid.

Tax Compliance: A bookkeeper should try and keep up with the ever-changing tax laws and regulations, which is not always easy. They will ensure that businesses adhere to local, state, and federal tax codes, preparing necessary documents and ensuring timely submissions.

Maintaining a General Ledger: The general ledger is the main accounting record for your business. A bookkeeper who offers accounting and bookkeeping services will manage and review the ledger. They will make sure that all entries made are accurate and categorized correctly so that everything is clear for you to understand and analyze.

Working with Accounting Software: Modern bookkeeping requires proficiency in accounting software. Whether it’s QuickBooks, Xero, or another platform, they will use these tools to streamline tasks and provide real-time financial insights to you.

Continuous Learning: As financial regulations, tax codes, and best practices evolve, bookkeepers often engage in continuous learning to stay up to date.

So when asking, ‘What does a bookkeeper do?,’ you can see that they have a lot of responsibilities, which extend far beyond mere number crunching. They play an important role in ensuring the financial stability and growth of a business. Proper bookkeeping not only helps your businesses avoid potential financial pitfalls but also positions you for sustained success.

What Does A Bookkeeper Do_2

Skills and Qualities of a Successful Bookkeeper

A successful bookkeeper should have a range of business and personal skills. Skills that compliment the profession, and what a bookkeeper does on a day to day basis. We have listed some crucial skills to look for in your bookkeeper: 

Organizational Skills: This person will often have multiple tasks on the go at the same time, such as managing invoices, tracking expenses, and reconciling accounts. If you have a business where there are many transactions taking place in a single day, they need to be able to handle this. Being able to efficiently organize and manage their responsibilities is essential.

Attention to Detail: This is an important skill. A small error can lead to significant financial discrepancies that cost you money or lead to compliance issues. A keen eye for detail ensures that every transaction is recorded accurately and mistakes are avoided.

Analytical Skills: A bookkeeper should be able to identify trends, anomalies, and potential areas of concern in financial data. This ability to analyze data allows for proactive management of potential financial issues.

Proficiency in Accounting Software: With the increasing use of digital tools in financial management, knowledge of popular accounting software like QuickBooks, Xero, and FreshBooks is important. This includes understanding how to input data, create a chart of accounts, generate reports, and overcome common issues.

Understanding of Accounting Principles: Knowledge of accounting principles (like GAAP) ensures that financial data is recorded in line with standard practices. When your books are handed over to the accountant for end-of-year reports or tax purposes, the process is much smoother and less expensive.

Numerical Aptitude: The right person should have experience in numeracy, so that they are able to do basic arithmetic as well as more complex financial calculations. A bookkeeper should be able to work with numerical data easily, accurately and confidently.

Confidentiality: Bookkeepers have access to sensitive financial data. It’s crucial for them to be trustworthy and maintain the confidentiality of this information.

Communication Skills: While much of their work may be with numbers, bookkeepers also need to effectively communicate with clients, vendors, and other stakeholders. Being able to explain things in an understandable way to you or the people your business interacts with is so important.

Time Management: Bookkeeping and accounting runs on strict timelines. The right person must be able to meet deadlines, especially around the end of fiscal periods or tax season.

Problem-solving Abilities: When discrepancies arise, a good bookkeeper can troubleshoot the issue, understanding where things went wrong and how to correct them.

Adaptability: The business world is dynamic, and a bookkeeper may need to adapt to new software, company changes, or updated best practices.

What Does a Bookkeeper Do on a Daily Basis?

A bookkeeper’s daily tasks include recording financial transactions, reconciling accounts, and generating financial reports. They also manage accounts payable and accounts receivable, process payroll, and ensure that the company complies with tax laws and regulations. A bookkeeper’s daily tasks may vary depending on the size and complexity of the business.

Some of these daily task may involve:

  • Monitoring financial transactions.
  • Entering data and ensuring all transactions are recorded promptly.
  • Managing cash flow and keeping an eye on business expenditures.

It is important that these tasks are done on a daily, if not every other day basis, as it will keep your records up to date and tidy.

What Does A Bookkeeper Do_3

What Does a Bookkeeper Do for Small Business?

A bookkeeper can provide customized bookkeeping solutions for your businesses in Miami. 

At EgomezCPA we help business owners meet their compliance requirements and then unlock the potential in their business with the right financial information at their fingertips.

A bookkeeper can also help your small business with insights into your financial health. Having the perspective of a trained profession can be a greatly beneficial. They can help you understand your business better and identify opportunities or potential risks.

What Does a Virtual Bookkeeper Do?

The rise of virtual bookkeeping has made it easier for businesses to manage their finances from anywhere in the world. A virtual bookkeeper provides bookkeeping services remotely, using cloud-based accounting software. They can help you manage your finances, track expenses, and plan for the future. 

This can be beneficial for your business as it offers flexibility and convenience. 

EGomezCPA provides virtual CPA services, and can assist you with a modern, flexible bookkeeping solution, no matter where you are.

What Does a Bookkeeper Do Vs Accountant?

While both bookkeepers and accountants deal with financial data, there are some key differences between the two.

Bookkeepers vs accountants_2

What Bookkeeping Software is Best to Use?

There are many bookkeeping software options available, each with its own set of features and benefits. Some of the most popular bookkeeping software options include  

  • Xero. A cloud-based accounting software that offers tools for invoicing, bank reconciliation, inventory tracking, and financial reporting, which caters primarily to small and medium-sized businesses.
  • Quickbooks. A comprehensive accounting solution that provides financial management capabilities ranging from invoicing and payment processing to expense tracking and payroll, serving a diverse range of businesses and professionals.
  • FreshBooks. An online invoicing and accounting platform designed for freelancers and small businesses, emphasizing user-friendly interfaces, time tracking, and client collaboration tools.

It is important to choose a software that meets the needs of your business. Make sure you have considered the scalability of the platform and also the integration capabilities. The most important thing is that it has to be user-friendly for you and your business. 

Benefits of a Bookkeeping Service

Hiring a bookkeeping service can help you save time and money, and allow up to focus on growing your business.

Time-saving: Entrusting financial record-keeping to experts will inevitably free up valuable time that you can then dedicate to other key areas of your business, like sales, marketing or client relationships.

Cost-effective: Hiring an in-house finance team can be expensive as there are lots of added expenses when you take on employees. Outsourcing to a bookkeeping company can often be more economical, especially for small to medium-sized businesses.

Scalability: As a business grows, so too does its financial complexities. Bookkeeping companies can easily scale their offerings in line with the growth demands of a business. This will make sure that your books don’t become messy and disorganized. You can continue to run your business in the same streamlined, organized way. 

Expertise: With a team of professionals, a bookkeeping service can provide a breadth and depth of financial knowledge that an individual bookkeeper might not have.

A Bookkeeping Success Story

Maria Lopez
Maria Lopez2023-03-30
Read More
Edgar is very knowledgeable, easy to get along with, very professional, and accessible. For many years we have been looking for a firm that checked all the boxes and we finally found it. Edgar was able to explained everything in detail and made the whole process easy, provided us with a piece of mind that are taxes were finally being handled by someone capable and reliable. He was accessible to answer our questions on time and walked us through the process in every meeting and kept us updated each step of the way.

At E. Gomez CPA, we have helped many Miami businesses achieve financial success with our bookkeeping services. Its one of the more popular services that we offer. Accuracy in your bookkeeping is essential and having the time and resources to do it yourself, is not something that many small or medium size businesses have. 

If you need help with your bookkeeping, speak to Edgar and the team today!

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top