Who is a bookkeeper?
Let’s say you own a small business that you established a few months ago. As your business is new and also small and you have few employees working for you, therefore you do not need any expert to support your financial transactions. Being the owner of your business you can keep all the financial records of your company.
Now let’s take a trip five years before the present time. So, within five years, he has flourished his business in different places and has hundreds of employees in his company. However, do you think it is possible for you to keep your tax records properly and exactly as you used to five years ago?
This is the situation where a bookkeeper becomes very important. A bookkeeper is a professional who performs common accounting tasks, such as maintaining a complete set of tax records, daily transactions, keeping track of funds related to your business, keeping invoices in a systematic way, etc.
Some basic terminologies related to accounting
Transaction- is the exchange of financial value.
Bill- when similar financial records are accumulated together, it is called an account.
Report- the statements of financial transactions for a specified time or a specified period.
Balance sheet- is a report of the economic condition of a business on a given date.
Active- are the integral items of a balance sheet, particularly in relation to liabilities and capital.
Passive- is the debt and money owned by a person or company.
Equity- it is the monetary value of assets or businesses beyond the amounts payable in mortgages, claims, liens, etc.
Statement of income- It is the report of expenses and income that determines the net profit and loss of a company or business during a certain period of time that is generally one year.
Returned- it is the combined amount of earnings of a person or a company.
Bills- are charges incurred during a business mission or trip.
Accounting period- is the time over which a statement of financial transaction is estimated.
Accounts payable- is a liability to a customer, has an open account generally for obtaining goods and services.
Depreciation- Bookkeepers use the term when trying to relate the cost of an asset to the revenue the asset helps the business earn.
Interest- it is the fee for the privilege of having a loan typically articulated as an annual percentage rate.
Inventory- are the resources, work-in-progress items, and fully finished items that are considered part of a company’s assets that are being or are to be offered for sale.
Paysheet- It is the amount of all the reimbursement that a company compensates its employees for a certain period of time or on a certain date.
trial balance- It is an accounting database where the bookkeepers put together the balances of all the ledgers in debit or credit columns.
profit and loss- It is the economic statement that summarizes the income, expenses and operating costs incurred during a given period, generally a fiscal quarter of a year.
Entry- are the economic possessions that are generated in exchange for the realization by an individual of any project or work or through the investment of capital. It is generally used to cover daily expenses.
Debits- is an accounting entry that results in an increase in assets or a decrease in liabilities on a company’s balance sheet or someone’s bank account.
Credit- it is a written agreement in which a recipient receives something of value now and agrees to repay the lender sometime in the next few days, usually with interest.
Double entry- It is the reality that every monetary transaction has equal and opposite effects on no less than two different accounts.
How can I understand that I need a bookkeeper?
Once again, let’s assume that you have kept all your financial data yourself for a long time. But recently he has started to face problems with the high volume of accounting, as he has grown his business in recent years or months and now has more employees. This is the time when you really need a bookkeeper. But during this period, you can outsource the bookkeeping service to an accounting firm or independent accountant. But after a few months or years, when your business will be very developed and you will have a good number of employees and larger financial transactions, then you will need to call your independent accountant again and again, every day to take care of your work properly. . . This is the exact moment when you need a permanent bookkeeper or contact a reputable firm for full-time bookkeeping services.
Your bookkeeper will do the following work for you
- It will save your time
- Will keep your books properly
- You will complete your VAT returns, income tax returns and annual account returns at a faster rate
- It will process all your business paperwork accurately on time
- It will keep all records within the company’s general ledger.
- You will update and maintain all financial statistics.
- You will maintain records of accounts payable, accounts receivable, bill payment, payroll and check registers, bank reconciliation, financial statements, custom reports, budget preparation, workers and business compensation insurance, employee health insurance, audit representation tax etc
Also, the specific responsibilities of a bookkeeper will depend on the company profile, the size of the company and the turnover of the company. You can spend more time on strategic planning when you’ve handed over all of your accounting responsibilities to a professional bookkeeper.