Defining the Role of a Bookkeeper
Whether you sell electronics, pet food., medical services, or investment advice, your business earns and spends money. A bookkeeper helps you keep records of all business transactions. This guide assists you to understand the specific roles of a bookkeeper and why you need to have a good one.
A bookkeeper is a finance professional who prepares, documents and stores all daily financial transactions. Traditionally, bookkeepers used volumes of files to store receipts, invoices, and bills. Today, the modern ones use software to efficiently track income and expenditure.
Bookkeepers vs Accountants
While bookkeepers are professionals in financial matters, there are some financial tasks that they cannot perform. They may keep daily transactions, but that is pretty much the end of their jobs. Enter accountants. These are advanced analysts who use the data compiled by bookkeepers to generate financial models.
It is safe to say that bookkeeping is concise and transactional. On the other hand, accounting can be subjective and therefore needs skilled interpretation of data and trends to make logical business conclusions and decisions.
So what does a bookkeeper’s day look like?
Every day, a bookkeeper will do some data entry and receipt taking. Their jobs revolve around labeling expenses while indicating how much money was paid for goods and services. At a doctor’s office, for example, a bookkeeper tracks incoming payments from patients and issues invoices to demand payments.
Having said that, bookkeepers do more than just enter numbers in Excel. They make careful entries to ensure that numbers tally. When auditors come knocking at your medical practice, these professionals make sure records are updated and that your business pays taxes properly.
Let us understand the roles further. Any bookkeeper will handle the following 4 main financial statements.
Income statement – this document indicates the expenses as compared to the revenue of your medical clinic. It is also referred to as a Profit and Loss Statement.
Balance sheet – this is a quick overview of the financial position of your business at a point in time.
Cash Flow statement – this statement is a record of the cash and equivalents of cash that enters and leaves your accounts.
Changes in Equity Statement – this statement is also known as Statement of overall recognized losses and gains. It indicates how your clinic’s reserves, share capital, and earnings have taken shape over a certain reporting period.
The following are other financial tasks that your bookkeeper does on a day-to-day basis.
- Keep and observe your company’s fixed assets
- Collect and submit taxes to the government
- Pay any contractor or supplier invoices
- Check levels of debt and make payments that are due
- Make records of incoming cash while depositing it at the bank
- Do accounts reconciliation every month
- Give financial statements
- Provide accountants with accurate financial statements during tax seasons
- Maintain the company’s annual budgets
- Report on variance issues when they arise
- Process and make employees payroll
Benefits of a Framingham Bookkeeper
Knowing where your money is coming from and where it is going is very important for your medical practice. Having a highly-skilled bookkeeper will bring this benefit plus many others as follows.
- Brings you peace of mind when books are updated
- Ensures that tax season goes well as planned
- Keeps detailed documentation to present to audit teams
- Affords you more time during your day so you can focus on core areas of business
- Helps you understand the logical flow of your medical clinic
- Makes you comprehend the costs, revenue, profitability and other key metrics of business
Ash CPA offers an array of bookkeeping and accounting services. Learn how a bookkeeper will benefit your business by scheduling a complimentary consultation. Call (617) 462-6651 or book an appointment online.