The work of the bookkeeper has been done for centuries and in the most basic of terms you will be keeping track of what’s happening to the money that a business trades in. Bookkeeping duties consist of keeping the accounts for a business. A business depends on the health of the financial reporting that the bookkeeper does. The official title of the person who does the bookkeeping work is the ‘bookkeeper’. The bookkeeper will provide an essential service to a business as she will process and record what is actually going on e.g. everyday transactions, as well as organising the information needed to produce financial statements.
Bookkeepers make sure that invoices, receipts, all the paper documentation from running a business is carefully ‘posted’ or written in to relevant books or logged into computer software created specifically to track and record the financial activities of the company.
A bookkeeper must also keep track of the bank account or accounts and relate the incomings and outgoings of the business to those accounts, noting that each transaction is matched to that of the daily life of the company. In other words one of the most important functions of the bookkeeper is to reconcile the bank account and other accounts against what is happening with the monetary dealings of the business.
The bookkeeper may have a wide variety of duties such as organising the paying of suppliers and logging purchase orders raised by the company. The invoices generated will need to be sent out as soon as possible and their payment needs to be clearly noted and tracked. Outstanding payments may need to be followed up. In some companies this will be done by the bookkeeper.
If the business is VAT registered or collects sales tax from clients then the revenues will need to be appropriately forwarded to the relevant government departments (e.g. HMRC or the IRS etc.). The bookkeeper will be responsible for making sure that the amounts collected make sense when related to the financial activities of the firm.
Depending on the way the company trades the bookkeeper may also need to collect and bank petty cash. If the business serves clients face to face and handles cash transactions then the bookkeeper will need to record and maintain the float. This will ensure there is money in the till in case the sale involves cash (e.g. and not a debit or credit card).
The bookkeeper may need to start from scratch and create an accounting system if it is a new company. She will need to create a chart of accounts and manage the paperwork using files and logging systems that will ensure that all the important papers can be found easily. In the UK firms need to keep six years of information in case of a government inspection. If the company grows they then may also need to use an accountant. The bookkeeper may need to be the spokesperson for the company if the accountant needs information for his or her analyses.
Bookkeepers should have basic common sense and have strong numeracy skills as they will be a vital source of information for the business. He or she will need to be capable of managing an orderly filing system for the accounts and records. Bookkeeping duties will involve using a computer or written system that basically logs every financial transaction the company makes so the bookkeeper may well need technical know-how or at the very least good, clear handwriting and touch-typing skills.
Bookkeepers may have qualifications showing their abilities to keep good and accurate records. They will need to run the business legally and show where the money that the business trades in came from and where it is going to, or credits and debits. The bookkeeper will also need to be discrete and aware of the confidentiality of their role. He will need to pay close attention to the nitty gritty and 100% thorough in all the details and data. If the bookkeeper finds inaccuracies in the records he or she will need to track back to work out what has gone wrong and update the information so that it is right. Bookkeeping requires extreme concentration and a love of restoring order to a chaos of paper and written data. The data needs to be in good order so that if the bookkeeper needs to show the information to the business owner or a third party she will be able to see the financial standing of the company at a glance which should then also help with future financial planning for the business.
Just about every business will need a bookkeeper to manage the records and keep track of the financial aspects of the company. Many people if they start their own company have to become their own bookkeepers and in this way they keep their pulse on the financial position of the company. However as a business grows it results in having to employ others to do this part of the firm’s work. In larger sized businesses there may be several bookkeepers or bookkeepers who specialise in one particular area of the business. A bookkeeper, therefore may also need to be a good communicator and be skilled at working with others to ensure that the financial records are passed over to the relevant section in a timely fashion and with regard to adequate security.
Bookkeepers are employed in the financial industry in payroll, general accounting and in tax preparation services. Bookkeepers also work in retail services as well as in healthcare, insurance and in the wholesale supply of goods to companies. Many people freelance as bookkeepers. The working hours of an employed bookkeeper would usually be during the week (Monday to Friday). If you freelance this may be more suitable for your requirements as you can then choose your hours to fit in with other commitments.
A bookkeeper’s duties are fairly specific and should not be confused with the work an accountant does. The accountant works with the data the bookkeeper provides and uses this to create analyses and reports on the financial aspects of a business to the management. An accountant typically has many years of training and formally recognised qualifications which should appear on the documentation provided by your accountant.