How your business operates is unique, so your bookkeeping should follow suit. Great bookkeeping is a financial tool you can use to make business management easier and reach your goals as a small business owner. On the contrary, cost flow assumptions aren’t useful for businesses that sell high-value goods, such as jewelry. They can opt for the specific identification method, which specifically tracks the item’s specifications and cost. This method doesn’t use assumptions or rules but requires a lot of paperwork.

• Better yet, encourage customers to pay using credit cards and via e-wallet.
• A bookkeeper should be comfortable with crunching numbers and processing data using spreadsheets.
• Inventory tracking is essential for retail and merchandising businesses because inventory is their main source of revenue.
• It will also record transactions automatically anytime an invoice is created or a bill is paid.
• They can opt for the specific identification method, which specifically tracks the item’s specifications and cost.

Pay the most attention to bills from your most important vendors, especially if they’re approaching 90 days past due. However, we don’t want to have bills that go unpaid for as long as 30 days. If you can’t pay early, strive to pay two to three days before the due date.

What does a bookkeeper do? The ins and outs.

If you’re considering hiring a bookkeeper or investing in bookkeeping software, a few things can play a part in your decision. The responsibilities you need someone to fulfill depend on the bookkeeper or bookkeeping service that your business needs. Each bookkeeping professional has their own expertise, just like each business has unique financial circumstances and bookkeeping needs. Typically, bookkeepers must posess strong numerical competence and a working knowledge of Microsoft Excel or other spreadsheet programs in order to compute and compile meaningful reports. Bookkeepers also (and should) have strong communication skills since they need to convey the financial state of the business to its stakeholders.

Your business may post dozens of accounting transactions each week. And if you make a mistake, you’ll be able to correct it much faster. As your company’s bookkeeper, you may generate a tax report for your CPA. The report assigns each expense to the correct line on the company’s tax return. Reviewing tax reports can help you maximize tax deductions for your business.

How do Bookkeepers collaborate with other teams within a company?

In this day and age, it is rare to receive check payments, especially for small purchases. However, businesses that sell luxury or high-value goods like vehicles will almost always see payments in the form of checks. As a liaison between departments, a bookkeeper interacts with department heads on a daily basis to discuss inventory needs. If merchandise, products or office supplies are running low, the bookkeeper must order more. If the company doesn’t have department heads or employees who are responsible for tracking and maintaining inventory, it might be the bookkeeper’s job to record these inventory levels.

Due to the timing difference between when a check is written and when it clears the bank, the bank and book balances of cash seldom agree. Bank reconciliation is an important process that a bookkeeper should perform monthly. It is a tool that helps you detect the existence of fraud and accounting errors and reveals the existence of irregularities, such as stale checks and nonsufficient (NSF) checks. Better yet, encourage customers to pay using credit cards and via e-wallet. You will no longer have to handle physical cash with electronic payments and therefore, reduce the risk of theft or loss of cash. Cash receipts from customers include both physical cash and checks.

Invoice Customers (Accounts Receivable)

This will include recording financial transactions, reconciling accounts, and generating financial reports. Bookkeepers help businesses keep their finances intact by keeping tabs on different accounts, transactions, and reports. A bookkeeper (also known as a bookkeeping clerk) is a professional who helps businesses and other organizations keep their finances in order. They manage general accounting ledgers, record journal entries (transactions), and generate financial statements. The responsibilities of a bookkeeper include a fair bit of data entry and receipt wrangling.

Bookkeepers offer support to a number of organizations, including small businesses, nonprofits, and corporations. They play a vital role in managing a business’s finances by documenting transactions, generating reports, and assisting with accounting efforts. Eric is an accounting and us recession on the horizon when experts think it could hit bookkeeping expert for Fit Small Business. He has a CPA license in the Philippines and a BS in Accountancy graduate at Silliman University. Meanwhile, accounting is the process of analyzing, recording, summarizing, and reporting the financial information of a business for its owners.

Learn More About Bookkeeper Jobs

They are vital to managing a business’s finances by documenting transactions, generating reports, and assisting with accounting efforts. You know what a bookkeeper does and what their day-to-day responsibilities look like. But how do these job duties translate as benefits for your business? Great bookkeeping goes beyond refined recordkeeping and balanced books. Additionally, there may be other responsibilities based on the unique needs of your business.