What Does a Bookkeeper Do? (and Why You Shouldn’t Do Your Own Bookkeeping)

What Does a Bookkeeper Do? (and Why You Shouldn’t Do Your Own Bookkeeping)

As a business owner, you realise that cash flow is the lifeblood of your company. The question is, how exactly do you know that your financial situation is healthy?

This is where bookkeeping comes in.

So, is bookkeeping hard? And what does a bookkeeper do that you can’t do yourself?

Here’s a rundown on everything you need to know about bookkeeping duties and why it is best to hire a professional.

Let’s get started!

What Does a Bookkeeper Do? Help with Record Keeping
One of the most important tasks that a bookkeeper can handle for you is record keeping.

It’s not uncommon for business owners to lose their receipts or to forget about small expenses that appear to be insignificant. However, if you fail to maintain accurate records each month, this will cause you time as well as income taxes down the road.

In fact, if you fail to have the proper records and get audited by the government, you could lose thousands of dollars in taxes. Hiring an expert to clean up this mess can be costly and more time consuming than getting it right the first time by hiring a bookkeeper from the start.

Reconcile Bank Accounts
Yet another way a bookkeeper can help your business is by reconciling your bank statements. Reconciling your account in a timely manner enables you to have up-to-date financial information.

By having a bookkeeper help you with the reconciliation process, you can more easily pinpoint possible issues and minimise potentially costly financial errors.

Categorise Expenses Properly
A bookkeeper can also help you to track your expenses and income in proper categories.

If you don’t categorise your expenses properly, you won’t have an understanding of where you are spending your money.

Approach Taxes Properly
A common mistake in business is not reporting and paying taxes properly.

For instance, you may fail to comply with laws related to the goods and services tax (GST) or the pay as you go (PAYG) quarterly instalment system. Unfortunately, oversight in reporting and paying taxes may result in major penalties and fines.

On the flip side, improper data entry might cause you to overstate your owed sales tax and thus pay more in taxes than you should.

A bookkeeper understands the tax treatment of each type of expense and income category. As a result, by hiring a bookkeeper, you can enjoy hefty tax savings.

Help with Payroll
Finally, a bookkeeper can help you to process payroll.

Processing payroll can be time-consuming. In addition, if you are not accurate, this can result in improper paycheck distributions that negatively impact your employees’ satisfaction.

A bookkeeper can help you to avoid these issues and give you more time to focus on other aspects of your business.

How We Can Help
If you’re asking the question “What does a bookkeeper do,” note that we offer top-of-the-line bookkeeping services.

However, we also offer other value-added financial services, such as financial modelling and financial reporting. In addition, we provide cash flow forecasting and even cloud accounting setup.

Get in touch with us to learn more about how we can help you to keep your business on track financially and flourish in the years ahead.

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