What Is Bookkeeping?

Written by Eddy Hood

At Ignite Spot, we talk a lot about bookkeeping vs accounting. You may be wondering, “What is bookkeeping, exactly? What does a bookkeeper do, and does it differ in any way from what an accountant does on a day-to-day basis?” We’ll explore the answers to these questions, along with what’s in a bookkeeper job description here.

What's a Bookkeeper?

What do bookkeepers do each day? A bookkeeper is a person who processes and records the financial transactions of a company on a day-to-day basis. Often employed by small or medium-sized businesses, a bookkeeper will provide accurate and efficient input and processing of key data.

What Does a Bookkeeper Do?

A bookkeeper will often focus on managing one or more types of accounts. For instance, one bookkeeper might focus on accounts payable and accounts receivable, whereas another will focus primarily on payroll. The level of responsibilities often correlates with the size of the institution. There are many aspects of a business’s finances that a bookkeeper may touch from travel expenses to taxes. This answer may beg the question, “What is bookkeeping, then?” It relates to data entry, math, maintaining accurate records, communicating issues, and watching an inventory or budget. The bookkeeper job duties vary, but are usually focused on getting data into the system correctly and on time.

Bookkeepers are data entry wizards with daily duties that are often centered on the proper entry and processing of financial information. They use bookkeeping software, spreadsheets, and databases to process information. Bookkeeper duties can occasionally be automated, but many forms of the practice still require a set of human eyes. Data is managed by a team, a firm, or one specific person.

It's important to write up a clear bookkeeper job description before you hire. Doing so will help you recruit a qualified candidate. But how much bookkeeping experience is needed? If you also have a trained accountant working for you, then you may be able to pear down the responsibilities of a bookkeeper in order to save some cash.

Bookkeeping vs Accounting

Many times, a bookkeeper job description and that of an accountant are lumped together into one category. The differences between an accountant and a bookkeeper are largely colloquial, but there are some key separations. So whats a bookkeeper do differently than an accountant? Bookkeepers mind the books, sometimes quite literally. They are vital to the day-to-day functions of a business. On the other hand, an accountant can double as an advice-giver, providing insights and consulting services as well. Generally, a bookkeeper is considered to be less experienced and less expensive than an accountant. Accountants need to have a degree, experience, and some sort of certification, whereas their less-experienced counterparts do not. Often, bookkeepers become accountants and are overseen by accountants.

Bookkeeper duties and responsibilities relate to the day-to-day financial operations of an institution, whereas accountants are responsible for the monetary “big picture.” While they might not have the overall managerial and consulting obligations of an accountant, bookkeepers can often tell you what is not financially viable and what is. A bookkeeper can serve as a whistleblower, coming across issues that can be indicative of real problems. However, it is the accountant’s job to see huge, overarching issues and also provide possible solutions.

Which Kind of Services Does a Small Business Need?

Do you need an accountant, a bookkeeper, or both? Knowing what a bookkeeper does is half the battle. Managing the bookkeeper responsibilities is the other half. Make sure your accounting team is not only qualified, but on task at all times and it all starts with a proper bookkeeper description in your recruiting manual.

Many, if not most, small companies require a unique blend of both types of services. Our online, outsourced firm features both for that reason. We can offer the day-to-day, involved services of bookkeepers and the CFO-level consulting services of highly experienced accountants. To learn more, download our pricing information or contact us at 855-694-4648 today. We can help you fine

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