What does a bookkeeper do, anyway?
Whether you are running a well-established firm or a fledgling new business, there’s one common denominator: money is coming in, and money is being spent. Keeping a handle on all those transactions is where bookkeepers come in.
So, what does a bookkeeper do, exactly? Here, we’ll provide a quick breakdown of bookkeeping services.
At a high level, bookkeepers are responsible for tracking all your business’s earnings and transactions as well as providing up-to-date, accurate financial information. That information, in turn, can help you make critical decisions about the financial future and overall strategy of your business.
Other bookkeeping services include helping your business prepare its key financial statements, pay bills on time, file and pay taxes, create and issue invoices and process payroll.
Of course, that’s by no means an exhaustive list, but you get the picture! Bookkeepers can be a vital part of any type of business.
Now that we’ve covered the “what” of bookkeeping, let’s look at four ways how having a good, small business bookkeeper on your team can benefit your bottom line:
4 Ways a Bookkeeper Benefits Your Bottom Line
- Bookkeepers offer peace of mind.
Running your own business comes with more than its share of daily stresses. Knowing your financial records are being looked after properly and that tax season won’t be a nightmare helps keep you sleeping soundly at night.
- Information is power.
As touched on earlier, with accurate, up-to-date financial records you can make better budgeting (and strategic) decisions because you can see exactly where your money is going.
- More freedom to play to your strengths.
With a good bookkeeper in place, you gain more time to work on the other areas of your business. Not everyone likes dealing with numbers – so focus on your strengths and leave the financials to a true specialist.
- Extra eyes watching your cashflow.
Bookkeepers can help actively monitor your business’s cash flow (and spending) so there are no unpleasant surprises or financial shortfalls down the line.
COVID - 19
Impacted by COVID-19?
Your small business may qualify for a CEBA loan
There’s help for small businesses that have been hit hard by COVID-19. But now – through the Canada Emergency Business Account (CEBA) – you may be eligible to receive an interest-free loan of up to $40,000 for one year. If the loan is repaid on or before December 31, 2022, 25 per cent of the loan will be forgiven. That means only $30,000 of the $40,000 load would need to be repaid.
If you’re unable to repay the loan by December 31, 2022, it can be switched to a three-year term loan at a five per cent interest rate.
To qualify for a CEBA loan, you will need to show that your business paid between $50,000 to $1 million in total payroll in 2019.
Lastly – if you have already applied for and received your CEBA loan, we can help you properly record the cash subsidy so your financial statements are fully accurate.
Modern bookkeeping is moving away from traditional paper hard-copies and over to the cloud. What does that mean and how does it work, exactly? For starters, the “cloud” refers to a massive remote server. Everything – including your accounting software, your ledgers and financial information – is stored on that server and accessed online.
The big benefit here is that your business doesn’t have to purchase, install and maintain accounting software, or worry about your financial records disappearing in a hard drive catastrophe.
You can also access your financial records any time, any place with any internet-connected device.
Why else might you make the move to a cloud bookkeeping platform?
- You get the benefit of strong, watertight security.
All your financial information is secured and backed up with highly sophisticated encryption. Cloud bookkeeping platforms also save your work on the go, so there’s little risk of losing critical bits of information.
- It cuts down on your paperwork.
Everyone has dreamed about going paperless, right? Well, with cloud bookkeeping, you can seriously reduce your dependence on printed-out hard copies. For example, receipts and invoices can be scanned and digital copies sent and stored safely in the cloud.
- Working in the cloud saves you time and money.
Traditional, desktop-based bookkeeping software and systems require you to make an initial investment in the hardware, then pay for ongoing maintenance. With cloud-based bookkeeping, there’s no physical IT infrastructure to worry about and your bookkeeping software can be accessed from anywhere with an internet-connected device.
- Collaboration and sharing are made easier.
Cloud bookkeeping allows you to share information quickly and simply with your management team, colleagues, or financial advisors – anytime, anywhere. That way, everyone involved with your business has access to what they need whenever they need it.
A closer look at automated bookkeeping
One reality of running a small business is that bookkeeping may be one of the many hats you end up wearing – even if it’s not an area of expertise. Try as you might, human error is going to be one of your biggest stumbling blocks – and minor mistakes during manual data entry can have major, time-consuming impacts on your business.
The good news is that the latest automated bookkeeping software and workflows can help you do much of the heavy lifting quickly and accurately.
So, how does automated bookkeeping work and why would it be beneficial to your business?
For starters, automated bookkeeping saves you time and money in the long run by freeing you from a lot of repetitive, manual work. For example, once you’ve created a record for your customers or vendors, you’ll never have to re-enter that information again. There’s also no need to build out detailed ledger files and countless data rows.
Once data is entered, it can be easily organized, saved and retrieved when needed in just a few clicks. This way, you can spend more time focusing on analysing data and making more informed decisions without being forced to spend hours collecting or organizing data.
Because you’re doing far less repetitive data entry grunt work, your chances of making errors go down. Your automated bookkeeping software can handle heavy calculations and crunch the numbers for just about any type of transaction.
Another major benefit of an automated bookkeeping workflow is that you can harness data to generate custom reports on many aspects of your business, from unpaid vendor invoices, to transactions by customer.
Of course, migrating to a cloud based or automated bookkeeping system isn’t going to be without its growing pains – especially if you’re accustomed to the traditional, manual way of working. And while adopting these new technologies can provide all the benefits you just read about, you still need to get there first!
Give yourself time to learn and experiment with new software and pick a strategic date to migrate to the cloud. You might even want to consider “starting fresh” on the first day of your business’s fiscal year.
Otherwise, pick a point in time that would involve the fewest changes to your data, such as after filing your taxes or when business might be moving slower than usual.
Now that we’ve covered what services bookkeepers can provide for your small business as well as the types of bookkeeping technologies out there, let’s talk about you.
Drop us a line and let us know how we can help take the stress out of bookkeeping, so you can focus on growing your business.