Have you ever wondered ‘what do bookkeepers do’? Well, lucky for you, you’re in the right place to find out! We know it can be a bit confusing distinguishing between an accountant and a bookkeeper. That’s why we will break it down for you and explain what exactly bookkeeping is, what bookkeepers do, and how it differs from accounting.
Bookkeeping, Defined
Bookkeeping involves the recording, storing, and retrieving of day-to-day financial transactions and information concerning the business. In other words, bookkeepers literally manage the business’ books and retain documentation for their business transactions.
What Do Bookkeepers Do?
Now it’s time to answer the popular question, ‘what do bookkeepers do?’. As noted earlier, bookkeepers record your business’ daily transactions, including receipts, purchases, sales, and payments. Bookkeepers typically track these transactions using cloud accounting software like QuickBooks Online or Xero. Moreover, bookkeepers keep a complete and accurate record of these financial transactions. The business’ receipts and documents are usually stored digitally in the cloud through receipt apps like Hubdoc and Receipt Bank. As you can probably tell, bookkeepers tend to be very tech savvy.
What Bookkeepers (Typically) Don’t Do
For the most part, a bookkeeper’s work ends there. The accountants then further analyze the financial records provided by the bookkeeper. Accountants will classify, analyze, summarize, and interpret the financial reports. Simply put, bookkeepers generate financial data, and accountants turn that data into information.
Some Bookkeepers Do It All
However, this isn’t always the case. Some bookkeeping firms actually offer the additional services that are typically passed on to accountants. These additional services usually include data verification, classifying and analyzing accounts, preparing tax returns, offering financial advice, and generating financial reports, such as balance sheets and profit and loss statements.
As you can probably imagine, it is much more convenient to have a bookkeeper that can do it all. First of all, you save the cost of hiring two separate professional services. Secondly, only having one allows them be more familiar with your books and business financials as a whole. On the contrary, if you have two separate financial professionals, they will need to coordinate their work and will only be exposed to half the picture. If you do have both a bookkeeper and an accountant, you will need to make sure that they share the information they discover so both parties have the full picture and all relevant information.
UpSide Accounting is a perfect example of a bookkeeping firm that offers basic bookkeeping services as well as all of the additional accounting services. We are a one-stop shop for accounting; bookkeeping, tax, planning, advice, and more! If you want to learn more about what we do and how we can help your business grow, please contact us for a FREE consultation!