As a business owner, you’re always busy creating new and exciting products or offering outstanding services to keep your customers happy.
Not to mention maintaining your workspace and looking after your employees.
There’s an equally important task that you cannot ignore. Bookkeeping!
Staying on top of your business’s bookkeeping keeps you compliant with tax and employment laws, gives you a clear understanding of your financial health, and positions your business for growth.
But when you’re already so busy running your business, how can you find the time for bookkeeping?
And what if you miss valuable opportunities for growth or make critical mistakes because bookkeeping isn’t your strong suit?
Professional bookkeepers can take this time-consuming task off your hands and use their expertise to organise your business’s finances in a way that’s not only compliant but also uncovers hidden savings and drives profitability.
Let’s answer the question, “What does a bookkeeper do?” and find out how they can unlock the full potential of your business.
Key Takeaway BoxWhat does a bookkeeper do? A bookkeeper manages financial transactions, keeps precise financial records, and prepares reports for taxes, financial planning, and decision-making. Their services ensure financial accuracy and compliance, improve cash flow management, and save you time and stress. |
Understanding the Role of a Bookkeeper
A bookkeeper manages daily financial transactions, including recording sales, purchases, receipts, and payments. They also handle tax preparation and payroll.
It’s a common misconception that bookkeepers and accountants perform the same tasks.
While bookkeepers focus on day-to-day financial activities, accountants tend to take a broader view, analysing financial data from bookkeepers to identify problem areas, offer strategic financial advice, and complete tax returns.
Key Tasks a Bookkeeper Handles
- Data entry and ledger maintenance: Inputting details of sales, expenses, and payments into an accounting system (typically cloud-based accounting software), then organising and updating those records as necessary.
- Recording transactions: Including accounts payable– the amounts a business owes to suppliers for goods or services received, and accounts receivable– the amounts owed to a business by customers for goods or services provided.
- Managing invoices: Preparing, sending, and tracking invoices to keep cash flow healthy.
- Reconciling bank statements: Comparing financial records with bank statements for consistency and accuracy.
- Preparing financial reports: Including profit and loss reports and balance sheets to give insights into a business’s financial health.
- Payroll processing: Making sure salaries are paid correctly and on time.
- Monitoring cash flow: Tracking the flow of money in and out of a business to manage finances and plan for future expenses.
- Tax preparation: Compiling the necessary information for tax accountants to file tax returns.
- BAS preparation: Preparing Business Activity Statements (BAS) for businesses to report their GST, PAYG, and other tax obligations.
Signs You Need a Bookkeeper
Are you wondering, “Do I really need a bookkeeper?”
Look out for the following warning signs!
- Feeling overwhelmed and stressed by managing your business’s finances and preparing for tax time.
- Spending too much time on bookkeeping tasks and not enough on running your business.
- Frequently making mistakes in financial records and reports.
- Falling behind on invoicing, receipts, and other paperwork.
- Difficulty tracking money coming in and going out.
- Uncertainty about your business’s financial health.
- Struggling to keep up with financial responsibilities as your business grows.
Bookkeeping Options for Your Australian Business
DIY
Pros:
- Cost savings.
- Complete control over your business’s financial records and processes.
- A better understanding of your business’s financial health.
Cons:
- Time-consuming.
- Stressful.
- Complex without proper knowledge.
- Potential for errors, compliance issues, and penalties.
In-House Bookkeeper
Pros:
- Direct control and oversight of your business’s bookkeeping tasks.
- Greater accuracy and consistency in financial records.
- Tailored financial management.
- Quick and easy communication.
- Prompt resolution of financial issues.
Cons:
- Expensive (salary, benefits, and training expenses).
- Periods of underutilisation when their workload fluctuates.
- Disrupted financial management when they’re absent or if they leave your employ.
Software
Pros:
- Automates repetitive tasks.
- Saves time.
- Reduces the risk of human error.
- User-friendly.
- Real-time financial insights.
- Integration with other business systems.
- Streamlined overall financial management.
- Accessibility to financial data from anywhere.
Cons:
- Setup can be tricky and time-consuming.
- Subscription costs can add up (especially for advanced features or multiple licences).
- Online data is always susceptible to cybersecurity risks.
- May not handle complex or unique financial scenarios without additional customisation or support.
Virtual Bookkeeper
Pros:
- More affordable than an in-house bookkeeper (save on salary, benefits, and office space).
- More time to focus on core business activities.
- Expertise in utilising bookkeeping software.
- Flexible working hours.
- Ability to adjust the level of service based on your business’s needs.
- Access to a wider pool of professionals with specialised knowledge and experience.
Cons:
- Potential misunderstandings due to not communicating face to face.
- Technical issues affect their ability to work and communicate with you.
- Sharing sensitive financial data online poses cybersecurity risks.
- Less control over day-to-day financial operations compared to an in-house bookkeeper.
How a Bookkeeper Benefits Your Business
Let’s cut to the chase: a professional bookkeeper will save you time and stress.
They’ll keep your books in order so you can stay compliant with financial regulations, be ready for tax time, and make informed decisions based on reliable financial data.
For example, if you run a small retail business, you might struggle to track incoming and outgoing payments, leading to cash flow issues.
A bookkeeper will manage your expenses to improve cash flow, allowing you to pay your bills on time and invest in new inventory or marketing strategies.
Or let’s say your tech startup is looking to attract investors.
Accurate and detailed financial reports are crucial for demonstrating your business’s health and potential.
A bookkeeper will prepare such financial statements to give your business the best chance of securing the necessary funds for expansion and innovation.
Do you own a hospitality business, like a small café? Keeping up with tax obligations can be overwhelming.
A bookkeeper will keep your financial records organised and up-to-date, making tax filing straightforward and hassle-free.
This assistance minimises the risk of taxation errors and penalties.
Online stores are integral to our modern society’s business landscape.
If you run an online store, managing the books can take up a significant portion of your time, preventing you from focusing on customer service and marketing.
Hiring a bookkeeper will free you up to concentrate on core business activities that drive growth, like better customer experiences and increased sales.
Simplify Your Bookkeeping: Let GeekBooks Handle the Details
So, what does a bookkeeper do?
Makes your life as a business owner easier!
For the best in the business, contact the GeekBooks team today by completing this online booking form or calling 02 9158 3591.
If you need a bookkeeper in Sydney, look no further.
But what if you live elsewhere in Australia? Or just don’t have the time for one-on-one meetings?
We offer virtual bookkeeping and accounting services for convenience and accessibility, regardless of your location.
Speak to us today for a free bookkeeping quote.
FAQs
What Are the Duties of a Bookkeeper?
- Recording daily financial transactions
- Managing invoices and receipts
- Reconciling bank statements
- Managing accounts receivable and payable
- Maintaining ledgers
- Preparing financial reports
- Processing payroll
- Monitoring cash flow
- Preparing for tax returns and BAS lodgement
Is a Bookkeeper the same as an Accountant?
No. A bookkeeper handles daily financial transactions and record-keeping, while an accountant lodges tax returns and analyses financial data to provide strategic financial advice.
Do I Need a Bookkeeper for My Small Business?
A bookkeeper will be invaluable to your small business.
They guarantee accurate financial records, compliance with tax regulations, and a picture of your business’s financial health.
All this adds up to saving you time and stress, avoiding taxation penalties, and making smarter decisions for your business.