What Is a Bookkeeper?
Quick Answer
A bookkeeper is someone who helps a business keep track of its money. They organize the money coming in, the money going out, and the financial records that show what is happening in the business.
For small business owners, professional bookkeeping helps keep financial records organized and makes it easier to understand how the business is doing. AZ Easy CPA provides bookkeeping and CPA services in Chandler, Arizona and beyond.
What Does a Bookkeeper Keep Track Of?
A bookkeeper keeps track of the everyday money activity in your business. When a customer pays you, you buy supplies, pay a bill, use a business credit card, or make another business purchase, those transactions need to be recorded and organized.
Bookkeeping may include:
- Keeping track of money coming into the business
- Recording business expenses
- Putting transactions into the correct categories
- Keeping QuickBooks organized
- Checking bank accounts against your records
- Checking business credit card accounts
- Finding transactions that may be missing or incorrect
- Fixing common bookkeeping mistakes
- Creating basic financial reports
You may hear the term “reconciling accounts” when talking about bookkeeping. In simple terms, this means comparing what’s recorded in QuickBooks with your actual bank or credit card statement to make sure everything matches.
The goal is to have an accurate record of where your business money came from and where it went.
Why Would a Small Business Need a Bookkeeper?
Many small business owners start by handling their own bookkeeping. When you’re just getting started and only have a handful of transactions, keeping track of everything yourself may work perfectly well.
As the business grows, there is usually more to manage. You may have multiple bank accounts, credit cards, automatic payments, customer deposits, equipment purchases, loans, subscriptions, and dozens or even hundreds of transactions.
Bookkeeping can quickly become something that gets pushed aside because you’re busy actually running the business. Before long, you may be several months behind or unsure whether the information in QuickBooks is correct.
A bookkeeper helps prevent that by regularly organizing and updating your financial records.
Can I Do My Own Bookkeeping?
Yes. You can do your own bookkeeping, and many small business owners do.
The bigger question is whether you have the time to keep up with it and whether you’re confident you’re doing it correctly. QuickBooks and other bookkeeping software can make the process easier, but the software doesn’t automatically know everything about your business.
For example, QuickBooks may see that you spent $500, but someone still needs to make sure that $500 is recorded in the right place. If transactions are put into the wrong categories, your financial reports may not give you an accurate picture of the business.
If you’re regularly putting off your bookkeeping, confused by QuickBooks, or unsure whether your numbers are right, getting professional help may make sense.
Is a Bookkeeper the Same as a CPA?
No. A bookkeeper and a CPA are different, although they often work with the same financial information.
A bookkeeper usually handles the regular organization of your business finances. They keep track of transactions, organize income and expenses, check accounts, and help keep your books current.
A CPA is a licensed accounting professional who has completed additional education, testing, and professional requirements. Depending on the services offered, a CPA may provide accounting services beyond everyday bookkeeping.
Some businesses have a bookkeeper and a separate CPA. Others work with a CPA firm that also provides bookkeeping so they can get both types of help in one place.
Why Does Good Bookkeeping Matter?
Good bookkeeping helps you understand what’s actually happening with your business money. Looking at your bank account can tell you how much cash you have right now, but it doesn’t necessarily tell you whether your business is making money.
Accurate bookkeeping can help you see how much money came in, what you spent, where you’re spending the most, and whether the business is making a profit.
It also makes things easier when you need information from your CPA. Instead of sorting through months of old transactions and trying to remember what everything was for, your financial records are already organized.
Frequently Asked Questions
Do I need a bookkeeper if my business is small?
Not necessarily. Some small business owners can comfortably handle their own bookkeeping. As your business grows or keeping up with the books becomes harder, hiring a bookkeeper can save time and help keep things organized.
Does a bookkeeper use QuickBooks?
Many do. QuickBooks is commonly used for bookkeeping, but someone still needs to review the information, organize transactions, and make sure everything is recorded correctly.
How often should bookkeeping be done?
Many small businesses update their bookkeeping monthly. A business with a lot of financial activity may need it done more often.
Can a bookkeeper fix books that are already a mess?
Yes. This is often called bookkeeping clean-up or catch-up bookkeeping. It involves going through older transactions, fixing mistakes, checking accounts, and bringing the financial records up to date.
Do I need both a bookkeeper and a CPA?
It depends on your business and what kind of help you need. Some businesses use separate professionals, while others work with a CPA firm that also provides bookkeeping.
Looking for Bookkeeping or a CPA in Chandler, Arizona?
AZ Easy CPA provides bookkeeping and CPA services in Chandler, Arizona and beyond. If you’re trying to keep up with the books yourself, have fallen behind, aren’t sure whether QuickBooks is correct, or simply want someone else to handle it, reach out to Chris at AZ Easy CPA.
Chris can take a look at where things stand, answer your questions in plain English, and help you figure out what kind of bookkeeping support makes sense for your business.
