What is a Bookkeeper
A Bookkeeper handle's all of a business's financial records, keeping track of money in and money out. They record all transactions in ledgers and compile information that accountants eventually use in tax preparation.
Why Is Bookkeeping Important?
Bookkeepers play a pivotal role in the business world. First, they help business owners see where profits and losses are occurring. Business owners have the necessary information to trace the responsibility for profits and losses in order to manage employees effectively. By looking at the numbers, a business owner can determine what the company should do to increase profits and grow the business.
Second, the business owner can ensure that all funds are being spent legally and ethically. If there is any fraud or theft within the ranks of the company, accurate bookkeeping will expose it.
Third, accurate bookkeeping ensures that the company will pay the proper amount of taxes. Paying too much in taxes is a waste of company assets, and paying too little is illegal and may lead to a highly embarrassing audit.
Many small business owners keep their own financial records. Others hire a bookkeeper to work as an employee of the company. However, the third option is to outsource the company's financial record-keeping. Consider these reasons why outsourcing may be the optimal choice.
It takes a lot of time to keep accurate books. Business owners who perform these tasks on their own usually have very little time to do anything else. Thus, companies usually have to hire an internal or external professional to handle their financial records.
When it comes to financial documents, mistakes aren't just bothersome. They can also lead to a government audit and criminal charges. When it comes to taxes, the government expects all companies to keep accurate records. Choosing an external bookkeeper allows the company to find a professional who understands financial laws better than internal employees do.
Paperwork vs. Passion
Every business owner has a passion. It's the reason that the business was created. Whether the company is a bakery, craft store, auto mechanic, or music store, the business owner's passion is not bookkeeping. Business owners who get too wrapped up in the administrative roles of running a business often lose sight of their passion and may even dread coming to work. People who have invested so much time, energy, and money into their true passion should have the liberty to pursue that passion.
Going back into one's field of expertise can be liberating. There are plenty of managerial tasks to perform, but acting as bookkeeper doesn't have to be one. By outsourcing that responsibility, small business owners are able to spend more time baking cookies, fixing cars, or doing whatever they opened a business to do.
Outsourcing allows a company to delegate to someone who is highly capable and credentialed. However, this also saves money because outsourced bookkeepers have multiple clients at any given time. Since bookkeeping is a general accounting task, some bookkeepers may even be qualified to assist in tax preparation. Choosing an accountant thus serves to consolidate services.
Outsourcing a company's bookkeeping is often a practical way to ensure quality financial records without wasting the company's resources. Every business is different, but outsourcing allows companies to choose the right bookkeeper to meet their needs.