So, What IS a Bookkeeper's Job Anyway?
The bookkeeper is the person who documents all of your financial transactions across your accounts. Typically, they use some kind of software to keep track of everything. Some may provide you with financial reports such as a P&L (Profit & Loss Statement), a balance sheet and perhaps a cash flow.
The bookkeeper’s primary job is to record what you have done and tell you where you are right now – financially. They may also help you send out invoices, collect payments, assist with check writing and bill paying, monitor debt, pay taxes, run payroll and other related tasks.
Don’t get me wrong: all of this is vital to the health of the business.
There are 5 things, however, that your bookkeeper won’t do – that you’ll typically pay your accountant a fee to cover for you:
1) A bookkeeper won’t tell you what your financial statements actually mean! While it is great to get the reports every month and see that net profits are positive, your financial statements can tell you a lot more information, especially when looking at a series over time. An Accountant is trained to look beyond the numbers for additional insights into your financial reports. For example, when an Accountant reviews your financial statement, he can give you an indication of how much cash you will have on hand next month so that you can know if and when you can purchase that widget that will make your life better.
2) A bookkeeper won’t tell you how much money you should be receiving in a particular timeframe! Knowing how much cash you will have helps you to understand what you need to do in order to grow your money. Perhaps you need to raise some capital to move things forward, or perhaps you need to incorporate some more aggressive Accounts Receivable activities. There is nothing worse than not being able to pay your bills or not being able to pick up materials because you are strapped for cash.
3) A bookkeeper won’t tell you how you should spend your money. Sure – it is your money and you can do with it as you please. But history has shown us that entrepreneurs don’t always make the best spending decisions. Many owners are impulsive and will spend money on something if they think it should do something. Knowing where and how to spend your money is like having a stock advisor whose goal is to get you the greatest return on your investment.
4) A bookkeeper won’t tell you how your finances are performing against your financial goals. Yes – they may offer assistance with preparing a budget. However, budgets are static…they don’t change. Meaning that changes in your business will impact your business, requiring answers to questions like these: Will you be able to recover? Do you need to make some adjustments in your business operations? It is one thing to identify that there is a gap, and another to help you understand why your finances are or are not performing as expected.
5) A bookkeeper won’t participate in your company’s strategic planning in order to help you determine what kind of budget your company needs to have in order to support growth. While it is great to have ideas, it is something else entirely to finance them: how much you need to finance, and if you are borrowing money – how much you can really afford to pay back.
At WistBooks Financial Management, we help our clients bridge the gap between what a bookkeeping firm will offer and what your accountant will offer. We offer fixed fees which includes regular advisory on both your finances and your business, in addition to ongoing feedback about your company’s financial health. We feel that an educated client is one who understands their business’s finances a in order to make good decisions on how to move their company forward.
If you’d like to learn more about WistBooks and how we can support you in taking your business finances further, click on the “GET STARTED” button on the top of this webpage to set up a complimentary meeting to discuss your business goals to see how we can help you get there more quickly.
WistBooks provides integrated Bookkeeping, Advisory, and Financial Management services that leverage financial data to help small businesses execute a winning strategy. Through Quickbooks Online cloud accounting, financial dashboards and regular online advisory sessions, we support business owners and leadership in maximizing their financial decisions to maintain and support company growth.
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