Whether they’re monitoring revenue coming in or money going out, bookkeepers are crucial to every company’s success. Without dependable bookkeeping, companies would be in big trouble – both legally and financially. As such, a good bookkeeper is a vital figure in any business.
But many people might not understand the role. Of course, bookkeepers deal with money; but what does their typical workday look like? In this blog, we’ll explore the daily tasks of a bookkeeper.
What Is a Bookkeeper?
Bookkeeping is one of the oldest professions in the world, dating back to ancient times. A bookkeeper looks after the day-to-day finances of a business, either as part of a larger finance department or as an independent bookkeeping service. They are also sometimes known as accounting clerks.
There are a few ways to become a bookkeeper. They deal with money and figures, so somebody with strong maths skills is a good fit. They also track payments and generate financial statements while monitoring various business needs. As every company is unique, a bookkeeper’s job can involve multiple duties.
What Does a Bookkeeper Do?
Fundamentally, bookkeepers help companies keep control of their finances. They’ll report to company directors with financial records, cash flow statements, and profit and loss statements. Bookkeepers also help small business owners understand their finances and plan budgets accordingly.
No matter the company, bookkeepers will undertake various daily tasks.
Monitor Financial Transactions
One of the essential bookkeeping tasks is keeping track of all payments. Bookkeepers closely follow all incoming and outgoing money with bookkeeping software, often using double-entry bookkeeping methods to balance the books. This allows them to record finances accurately – and spot any errors or overdue payments.
General Ledger Entry
In some companies, the bookkeeper will enter all debits and credits in the general ledger. While this may sound confusing, it’s a standard part of bookkeeping. The general ledger is a financial record that summarises all journals, financial transactions and business assets. It’s also a crucial part of every business, helping accountants and business owners assess their financial health.
Accounts Receivable
Bookkeepers are often responsible for looking after accounts receivable. In most companies, this means handling money coming into the business and contacting anybody who might be late in making payments.
Accounts Payable
Likewise, bookkeeping also involves accounts payable. This involves reviewing invoices your business has received, entering them into the payments system, and making those payments. As it deals with outgoing money, accounts payable requires excellent attention to detail.
Date Entry
Depending on how a company manages their finances, a bookkeeper might also perform data entry tasks. This is often a basic but vital part of the job. Bookkeepers will use spreadsheets or accounting software, such as Quickbooks or Xero, to keep the system up to date.
Create Financial Reports
Next, bookkeepers may use the information from their entries to create financial reports. These will often be sent directly to business owners and include documents like:
- Income statements
- Expenses statements
- Balance sheets.
These reports help directors understand how the business is performing.
Bank Reconciliation
Accounting departments must be free from errors. A key part of that process is carrying out bank account reconciliations. This will typically be part of a bookkeeper’s regular routine and will involve collecting all bank statements, comparing them against business accounts, and investigating any missing payments or discrepancies.
Organise Financial Records
It’s also essential to store financial records correctly. As such, a bookkeeper will organise and store financial records. The records may need to be accessed years later for tax or audit purposes, so this process requires a careful and dependable person.
Deal With Taxes
Finally, a bookkeeper may also handle their company’s tax liabilities. They’ll carry out operations like tax filing and preparing tax returns to keep records updated. They may even prepare government statements every year or quarter.
Is a Bookkeeper the Same as an Accountant?
Even though a bookkeeper carries out many of the same duties as an accountant, they are not the same. As we saw above, bookkeepers generally deal with daily transactions and finances. Accountants may also do this, but will also use financial data for forecasting budgets and planning business goals.
Accountants typically require a bachelor’s degree. This can mean years of study before being qualified. On the other hand, bookkeepers can train with a number of bookkeeping courses – qualifying and getting employed much more quickly.
Job Roles for a Bookkeeper
Once qualified, a bookkeeper has various options, both full-time and independent. Many choose to work in the in-house accounting department of a large company. This brings job security and a chance of promotion with experience – although it will generally mean taking on less varied tasks day-to-day.
There are also many opportunities for bookkeepers to work in smaller companies. Here, they’ll typically be part of more modest accounting department, often reporting to a finance manager or director. They’ll handle the usual daily tasks and may have the chance to take on further responsibilities.
Finally, many professional bookkeepers choose to offer their own bookkeeping service. They’ll take on many clients – mostly very small companies – and act as their financial department. Usually, they’ll keep track of money and create reports to help the business owner. In this scenario, a bookkeeper will be responsible for almost all financial duties.
Online Bookkeeping Courses
Bookkeeping is a rewarding career with many different paths. Whether they work in large corporates, small businesses or independently, qualified bookkeepers can find work in companies worldwide.
With an online bookkeeping course from Oxbridge, you’ll learn all the skills you need. You’ll study when it suits you, fitting your learning around your schedule. To get started, check our bookkeeping courses today. You can also contact our helpful learning advisors for more information.