What is bookkeeping?
What is bookkeeping?
A lot of you would be wondering what is bookkeeping. There is a lot of confusion when it comes to the actual job description of a bookkeeper. People tend to obfuscate it with the day to day tasks performed by an accountant. We will be discussing the actual job description of a bookkeeper in this post.
A bookkeeper is responsible for determining and maintaining records of financial transactions of a firm on daily basis. A bookkeeper is typically recruited by small and medium sized enterprises and he or she is designated the responsibility of furnishing precise and handy entry and processing of important information.
Tasks of a bookkeeper
A bookkeeper typically manages one or more types of accounts. For example, one bookkeeper may concentrate on accounts payable and accounts receivable while the other one will be designated the responsibility of working on the payroll. The extent to which a bookkeeper is assigned different tasks depends on the size and capacity of the employer. There are numerous dimensions of an enterprise’s finances that a bookkeeper has to concentrate on, ranging from travel expenditures to taxes. Now, you would all be getting confused again! In reality, bookkeeping is related to data entry, mathematics, accurate maintenance of financial records, and communication of issues and oversight of inventory or budget.
Bookkeepers are data entry freaks with day to day tasks that are typically predicated on the appropriate entry and processing of financial data. They employ bookkeeping software, spreadsheets and databases to process tons of complex financial information. Generally, bookkeeping duties may be automated but there are certain tasks that need to be supervised by humans. Data can be entered and processed by an individual, a team or an entire company.
Comparison between bookkeepers and accountants
On several occasions, the job description of a bookkeeper and that of an accountant is considered the same. Generally speaking, the difference between an accountant and a bookkeeper are simply informal, however, there are a few significant distinctions between the two. So, what is the difference between the job descriptions of an accountant and a bookkeeper? Bookkeepers are responsible for minding the books and this can be taken in literal terms often. They are pivotal to carrying out the daily functions of a business. On the contrary, an accountant may serve as a judicious adviser and provide in-depth information and consultation regarding an enterprise’s financial health. A bookkeeper is typically less seasoned and does not cost as much as an accountant. Accountants should possess a relevant degree, experience and appropriate certification whereas bookkeepers are not as experienced and qualified as the accountants. Generally, bookkeepers become accountants in the long term and are supervised by well-qualified accountants.
As discussed above, a bookkeeper is responsible for performing the day to day tasks related to the finances of a company whereas accountants keep an eye at the broader picture of a firm with regard to its monetary gains. Bookkeepers do not have the managerial and consulting duties of accountants but they still are in a position to provide you advise regarding the financial viability of different operations. A bookkeeper can inform the company’s executive about any underlying financial issues to prevent them from spiraling up. Having said that, it is the primary obligation of an accountant to keep an eye at the massive financial issues gripping an organization and to provide prudent advice with regard to their resolution.
Services required by a small business
Small enterprises typically require the services of both an accountant and a bookkeeper. There are numerous online, outsourced firms that provide these services.