Understanding the Essential Role of Bookkeepers in Small Business Operations: Choosing the Right Bookkeeper for Your Business Needs.
Streamlining Your Freelance Business: Exploring the Benefits of Hiring a Professional Bookkeeper for Financial Tasks and Taxation.
As a freelance business owner, managing the multitude of daily tasks can be overwhelming. Handling finances, organization, and accounting responsibilities can quickly become stressful and tedious.
That’s why I highly advise evaluating the option of managing bookkeeping and taxes independently versus enlisting the expertise of a professional bookkeeper.
Bookkeepers come in various levels of proficiency. While all possess fundamental knowledge, advanced bookkeepers excel in areas such as tax preparation and executing skilled operations like generating financial statements.
Unveiling the Role of a Bookkeeper
Key Responsibilities in Bookkeeping:
- Classifying Business and Personal Expenses and Transactions
- Issuing Invoices to Clients and Vendors
- Reviewing Receipts and Validating Credit Card Statements
- Managing Payroll and Ensuring Timely Monthly/Quarterly Tax Payments
- Balancing Bank Accounts and Establishing Budgetary Plans
- Generating Monthly Reports and Processing Profit and Loss Statements and Balance Sheets
- Compiling Tax Documents and Financial Reports for the CPA
Essentially, Seek a Bookkeeper Well-versed in Your Accounting Software, Business/Industry, and Personal Preferences to Fulfill Your Specific Needs.
Exploring Various Categories of Bookkeepers
1. Comprehensive Bookkeeper
This individual handles financial transactions and postings for companies or individuals. Their expertise may encompass basic single-entry bookkeeping or more intricate double-entry bookkeeping, and they are familiar with financial software like Quicken or QuickBooks.
A general bookkeeper, without specialized training, assumes the responsibility of recording all transactions into the general ledger, managing invoice and payment postings, and conducting monthly bank reconciliations.
These bookkeepers often commence their career at an entry-level position, progressing towards overseeing the entire financial department based on their aptitude and proficiency in organizing financial data.
While prior experience is not mandatory, conducting research or enrolling in relevant courses can prove advantageous. Continuous education or staying abreast of specific updates is not obligatory.
2. Full Charge Bookkeeper
This individual shares many responsibilities with a regular/general bookkeeper. However, they also have the additional tasks of preparing financial statements and, in most cases, managing payroll.
Full Charge bookkeepers typically oversee financial transactions for small-to-medium-sized companies, leveraging their elevated level of experience, which may include completion of accounting courses or classes.
Similar to basic bookkeepers, there are no specific requirements to stay updated on education or changes for a Full Charge bookkeeping position.
3. Certified Bookkeeper
This category of bookkeeper possesses extensive knowledge and expertise. They handle all the responsibilities of general and full charge bookkeepers on a daily basis, along with additional tasks.
Certified bookkeepers must have a minimum of two years of proven experience in the accounting field and successfully pass a comprehensive four-part national exam.
Their responsibilities include preparing financial statements, managing daily transactions, overseeing accounts payable and receivable, maintaining the general ledger, and fulfilling any other accounting requirements.
As a Certified Bookkeeper (CB) with over 10 years of experience, I obtained my training through the American Institute of Professional Bookkeepers.
Certified Bookkeepers earn the CB designation, similar to the CPA title, and hold accountability for payroll management, state reporting, quarterly tax payments, as well as the preparation of year-end tax documents and financial statements.
To retain the CB designation, ongoing education and staying updated on evolving tax laws are mandatory. Hiring a Certified Bookkeeper differs significantly from a general or Full Charge bookkeeper and entails higher costs for managing your business finances.
Optimizing Your Business by Outsourcing Bookkeeping Services
“Unlocking the Benefits of Outsourcing Your Bookkeeping”
Thanks to the digital age, you now have the opportunity to outsource your bookkeeping to a firm or agency at a significantly lower cost compared to hiring an in-house bookkeeper.
In fact, retaining a bookkeeper on staff can range from $300 to $2,000 or more per month. However, outsourcing your bookkeeping to an established firm not only saves your business but also your budget.
By partnering with reputable firms like Bench, you gain access to your dedicated bookkeeper and can interact with them on a daily basis, if necessary.
Personally, I have utilized Bench’s services and have established a great relationship with their team. If you require assistance, I can provide you with a referral. The beauty of Bench is that you can sign up for a free trial to experience their service firsthand.
If it doesn’t meet your expectations, no harm is done. However, if you find value in outsourcing your bookkeeping to Bench, their starter package is available for only $249 per month.
Choosing the Ideal Bookkeeper for Your Business Needs
“Exploring the Role of Bookkeepers in Business Operations”
Bookkeepers can be referred to by various titles such as head bookkeeper, junior accountant, accounting clerk, or even “bean counter.” However, their primary objective remains consistent—to effectively manage the daily financial records for businesses and individuals.
Bookkeepers play a crucial role in ensuring the smooth operation of small businesses. For those in the initial stages, hiring a less formally educated but cost-effective bookkeeper or accountant might be a suitable option. This allows for close collaboration as the business expands, making it easier to impart specific methods and preferences.
On the other hand, if you require a more seasoned bookkeeper, it is advisable to seek someone with advanced experience, such as a Certified Bookkeeper. Certified Bookkeepers possess extensive knowledge, expertise, and honed skills, making them a valuable asset to your business.
You may want to read: Strategies for Handling Non-Paying Freelance Clients: 8 Step Approach