0

What do Bookkeepers do Daily?

PUBLISHED Nov 21, 2022, 2:58:18 PM        SHARE

img
imgmoneymanbizsolutions Blog

What do Bookkeepers do?

You would think that what a bookkeeper did was straightforward. But bookkeeping is about organizing business chaos and creating a summary of a company’s financial life. Bookkeepers apply accounting procedures and best practices to build a financial story for a business.

A bookkeeper brings structure to a business’s financials by building detailed reports and uses these reports to gives guidance to the business owner on the health of their business.

A Bookkeeper’s Daily Task List

  • Check bank statements
  • Organize and classify financial transactions
  • Categorize costs and revenue
  • Ensure vendors and stakeholders are paid
  • Be sure financial records are ready for financial reporting

What are a Bookkeeper’s DailyDuties?

A bookkeeper brings order to the flows of money going in and out of a business. These transactions may need to be investigated, recategorized, and reported to different stakeholders, governments, and banks. Here are five tasks a bookkeeper does daily.

1). Check the Bank Account Every great plan falls apart if you’re not checking it. In this case, even the best financial plan will fall apart if you’re not checking up on your bank account. A bookkeeper checks a business’s bank account daily to ensure that that the business isn’t being charged discrepant costs. The bookkeeper makes sure that expected revenue has come in and that expected costs are being paid to avoid incurring late fees.

2). Organize and classify transactions A bank statement gives a snapshot of a business’ transactions, but it doesn’t give a whole picture of the business. A bookkeeper fills in the details by organizing and classifying transactions into different accounting buckets.

For example, a company cannot classify a car loan payment as a cost, only the interest portion. This is important when it comes to taxes as only the interest can be deducted as a cost. The same goes for credit card payments. Many small business owners mistakenly declare credit card payments as a cost, while only the interest is a true deductible expense.

But its understandable why this is a common mistake for small businesses. On a bank statement, this is a single transaction. A bookkeeper see’s these transactions and takes the time to classify this single transaction intotwo different accounting buckets.

3). Categorize Costs and Revenue Once transactions are properly classified, a bookkeeper can then place them in the right categories on a financial statement.

Continuing our previous example, that single car loan payment needs to be placed into multiple categories on a financial statement. The interest is a cost that is added to the income statement. The portion of the payment that lowered the car loan needs to be reflected in a change in the company’s balance sheet.

The credit card payment must also be carefully categorized. Like the car loan, the credit card interest is an expense, while the pay down of the credit card will decrease the company’s debt on the balance sheet. This paydown of the credit card cannot be claimed as an expense while the interest payment can be.

4). Ensure Vendors and Stakeholders are paid A bookkeeper has a deep understanding of a company’s business and act as a guard for the business. Once a bookkeeper has categorized all the company’s transactions, they can spot discrepancies in the business’ money flow patterns.

The bookkeeper can advise the small business when further financial actions are required. If a cost hasn’t been paid, they can help the business ensure it gets paid. If a distribution to partners needs to occur, the bookkeeper can note this to the owner.

A disruption to the flow of money in or out of the business can have a detrimental effect on the actual business itself. If a vendor isn’t paid, they may stop providing necessary services to the small business. A distribution to partners requires cash to be paid, so being sure invoices are converted into paid revenue is vital. The bookkeeper protects the business by acting as a guard for the small business and raising the red flag when issues arise in a company’s money flows.

5). Report Company Performance The final step that a bookkeeper does daily is make sure that a company’s financial reports are up to date. While a bookkeeper doesn’t prepare formal company reports daily, the bookkeeper stays vigilante and makes sure that their processes continue to work so that reports can be made at the end of the quarter with minimal problems. When it’s time for formal financial reports to be created, the process should be straightforward. To ensure this, the bookkeeper tracks the financial performance of the company daily and ensures everything is reported correctly. By keeping vigilante daily, the bookkeeper ensures that financial reports are ready for the company’s stakeholders. These stakeholders include the IRS for taxes, banks forcredit, and owners so they can manage the business.

Conclusion

Bookkeepers need to be vigilante to make sure a company’s finances are reported accurately to all stakeholders. A bank statement cannot give a company a full picture of their finances, but with the help of a bookkeeper, transactions can be properly classified and categorized. With a full picture, a bookkeeper advises the business owner of any discrepancies in the company’s finances. Once these discrepancies are cleared by management, the bookkeeper ensures that the company’s financial records are organized so that they can be reported to any stakeholder who needs to see the financial health of the company.

Check out our supporting video here: https://youtu.be/wDlb2bTo71Q

Originally Posted on moneymanbizsolutions.com


Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
FTX Crashes: Everything You Need to Know
Image

Ever wanted to know what the FTX crash is all about? Find out in this article.

November 2022 Stock Considerations
Image

With a new trading month already in full swing it is time, once again, to highlight some of my potential stock purchases.

How is your Retirement Plan?
Image

Retirement Accounts, Retirement Planning, and what your purpose means in retirement

Watching & Waiting
Image

Stock Market Commentary

How To Save Money Fast – 26 Easy Tips
Image

We all know it’s important to save money. But how do you do that when inflation is up, mortgage rates have increased, and rents are rising? Oh, and don’t forget – extra spending is coming with the holidays around the corner. Yet even in tough times, there are strategies to help build savings fast.

Here Are The Requirements For A Hard Money Loan
Image

Hard money loans are one of the more popular options for buying fixer-upper homes to renovate and resell for a profit. While there are alternatives available – such as using a traditional or renovation mortgage – hard money loans usually fund far faster and are less restrictive. If you’re considering a hard money loan for an investment property purchase, here’s a look at what hard money loans are and the typical requirements for a hard money loan.

Unstable Value Funds (VI)
Image

Well, the last installment in this series was 2009. I ran a Guaranteed Investment Contract [GIC] desk at Provident Mutual from 1992-1997. I also managed our internal stable value funds for our pension line of business. This was during a period where increasingly Stable Value Funds were being replaced by bonds and bond funds being wrapped by a type of derivative that would allow for “benefit responsive payments,” called a “wrap contract.”

What is a dividend trap, and how do you avoid it?
Image

With recent declines in stock prices, dividend traps are becoming more prevalent. In this blog post I'll describe what is a dividend trap, it's potential downfalls, and how to avoid these traps. Before we begin, you need to understand dividend yield, and the dividend payout ratio.

Margin call What is it ?~No.1 Beginners Guide
Image

For starters this happens from time to time. Today we address the no.1 cause of sleepless nights for most newbie traders risking their hard earned money in the markets especially when it comes to a margin call what is it and how can you avoid it?

Why I’m Fascinated With Dividend Investing
Image

I’ve been fascinated with dividend investing for many years. It goes back long before I started my journey to financial independence and early retirement. It seems so simple. You buy a company stock that is stable and has dividend history on their side. A stock that figures for a potential future of continued business with dividend and stock growth.

6 Investing Lessons from Our Honeymoon’s Terrible Start
Image

We had a terrible start to our honeymoon. Bad luck and human incompetence torpedoed our first travel day. Naturally, I took it as an investing lesson. Our itinerary was Rochester –> Boston –> Tokyo –> Hanoi. Then after a few days in Hanoi, onward to Chiang Mai, Bangkok, and other parts of Thailand. But things went poorly from the start.

WHAT PARENTS NEED TO KNOW ABOUT HELPING TEENS BUDGET
Image

​Many teens think they know almost everything – that is until they have to experience adulthood for themselves. Parents of adult children will likely tell you that when their children were teens they, as parents, “knew nothing,” but when the magic of adulthood came around, everything changed. Your teens may even think they know how to budget. As a parent, however, you know that it’s not always easy to make and stick to a budget. So how do you teach teens about budgeting? At Wealthy Habits, our goal is to make the conversation easier and a lot more fun for both parents and teens. Here are three tips we share in our online parent webinar, How to Teach Your Kids About Budgeting.

Budgeting on a Single Income
Image

According to a 2017 report in Market Watch, half of American households are living paycheck to paycheck, and about 49% of Americans worry about their financial well being. Living on a single income only amplifies the stress and worry about finances. Having a plan, maintaining fidelity to it, and re-evaluating that plan can all help minimize the stress and allow you to have control over your expenses and your future.

US Economic Growth Expected To Continue In Q4
Image

The recovery in US economic activity in the third quarter appears set to continue in Q4, based on the median for a set of estimates compiled by CapitalSpectator.com. Although the numbers point to a slowdown in growth, the current Q4 nowcast highlights the possibility that output will post back-to-back quarterly increases for the first time this year

Higher Japanese CPI Won't Change the BOJ's Stance
Image

The capital markets are heading into the weekend mostly quietly in a consolidative fashion.

Skyworks Solutions (SWKS) Stock: An Undervalued Chipmaker
Image

Over the past five weeks, the market has been up 14.7%. Also, after the CPI report was issued last Thursday morning, the market and almost all the stocks had a tremendous run-up. In two days, the market is up nearly 7%.

2 Recession-Proof Utility Stocks With Safe Dividends
Image

The Fed has raised the Fed Funds rate six times this year to combat inflation and the last four times at a 0.75% clip. The current 4% rate is the highest in well over a decade. But the Central Bank has indicated that it will take more pain to get that inflation genie back in the bottle.

Markets are Less on Edge as the Darkest Scenarios seem Less Likely
Image

Overview: The situation in central Europe is still intense but it appears top US, European and Polish officials are more reluctant than some market participants to attribute the darkest of intentions and paint extreme narratives.

WestRock (WRK) A Dividend Stock Comeback Story
Image

Yes, this is a random WestRock (WRK) dividend stock, come back story. Why is it a comeback? WestRock decimated their dividend during the height of the pandemic from COVID-19. One of the world’s biggest, packaging companies reduced their dividend to $0.20 per share, per quarter from the high of $0.465.

Investing Starts with an Investment in Yourself
Image

Invest in yourself - it’s the best thing you can do.