Do Bookkeeper Make Lot of Money?
Bookkeeping is an integral part of any business or accounting practice. It involves meticulously recording every financial transaction within the institution. Bookkeeping allows you to maintain a clear and up-to-date record, which is highly beneficial for other financial activities such as budgeting, forecasting, and tax preparation.
This process was quite tedious because it used to be done manually by a bookkeeper, but that’s not the case now, thanks to accounting software. Only bookkeepers are qualified enough to get this job done perfectly, so you will either have to recruit an in-house team of bookkeepers or choose to outsource bookkeeping.
There are some interesting things about bookkeepers, which you will learn as you read the blog.
What Bookkeeper Responsibilities Are
Bookkeepers have a multitude of responsibilities. Any lack of proper handling of these responsibilities can hinder the proper functioning of other financial activities in your accounting practice. Let’s understand some of these responsibilities.
Keeping Track of Daily Transactions
Previously done manually, bookkeeping was a time-consuming process because each transaction had to be recorded. Thankfully, such a situation does not exist anymore due to digitisation through the adoption of accounting software. Also, bookkeepers keep your records up-to-date, thus enabling you to create accurate financial reports that show the actual financial condition of your clients.
Managing Cash Flow
Cash flow management is an important function of a bookkeeper and it keeps track of your client’s inflow and outflow. By keeping a track, the bookkeeper keeps your client’s updated so that they can maintain cash for payments of salaries and for other operation expenditures.
Maintain Payroll for Businesses
A bookkeeper must maintain the timesheet regularly and track payroll-related taxes and commissions. They also enable bank reconciliation so that your clients can pay their employees on time, making this an important responsibility.
Assist in Taking Important Decisions
Most decisions that your client makes have financial implications. For example, hiring new recruits or buying assets can only be done if your client’s financial situation allows it. Hence, it is important for bookkeepers to keep an eye on the books and maintain them so that they can make accurate and informed decisions.
Gaining Investor’s Trust
Among your clients will be businesspeople who, in order to expand their business, require investments and loans, and to get that, they will require a financial footing. Investors or banks will only invest in a business if they look at the books. Hence, the books must be in the right order, which can be organised by a bookkeeper. Books that are organised will help increase the confidence of the investors.
How Bookkeepers Manage Cash Flow for Business
Keeping track of business transactions and maintaining an up-to-date record, that’s the main task of a bookkeeper. Up-to-date records contain accurate and useful financial information, which will benefit your clients, who consider this when making important business expansion decisions. Hence, all businesses, whether big or small, will require professional bookkeepers to maintain a positive cash flow and aid in business expansion.
So, let’s concentrate on how bookkeepers can help your clients in cash flow management.
Tracking of Each Transaction
Bookkeepers always monitor daily transactions, making sure that they are recorded without errors. Through regular monitoring, bookkeepers can track the income and expenses of any organisation, thus helping the owners make decisions accordingly.
Predicting the Cash Flow
Bookkeepers play an important role in making cash flow forecast on a monthly and quarterly basis. These forecasts can help your clients to achieve effective cash flow management especially for funds for salaries. Through forecasting, your clients will get an idea of cash inflow and outflow so that they can make informed decisions.
Invoicing Proactively and Effectively
To maintain a positive cash flow, income must flow regularly without any delays. The bookkeepers maintain the receivables by sending out invoices as soon as the clients make deliveries. The invoices have the terms of payment mentioned on the bills.
Getting Bank Reconciliations Done Regularly
Any professional bookkeeper would do bank reconciliations, which are to match the bank statements with your client’s internal financial records. This is done to identify errors or mismatches that occur due to cash transactions, forgotten invoices, or calculation errors.
Your client’s will be able to avoid penalties from HMRC because through bank reconciliations errors are identified and corrected.
Reduction in Expenses
Your clients may ignore the business deductions, but they cannot escape the eyes of a bookkeeper, thus helping them save on taxes. Also, bookkeepers keep the books in an organized manner so that everything is in place during tax filing. Furthermore, if you are thinking of bookkeeping and accounting outsourcing, then you can reduce your expenses further thanks to the use of technology and the reduction of recruitment of in-house staff.
Debt Management
Bookkeepers also track all debts on behalf of their clients. To do that, they include them in their cash flow forecast along with other payments. This ensures that the payments are not missed and are part of the financial projections.
To conclude, bookkeepers are important for accounting practices to maintain the smooth business function of their clients by maintaining cash flow and making their lives easier.
Do Bookkeepers Maintain Payroll for Business?
While bookkeepers are not payroll experts, they have a role in managing payroll. They have to keep track of payroll-related taxes and commission. They also work on bank reconciliation so your client’s employees are paid on time.
What Qualities Are Needed for a Bookkeeper?
By now, you have understood the responsibilities of a bookkeeper. To fulfil these responsibilities, a bookkeeper would need certain qualities and skills. Let’s find out what those skills are.
Strong Communication Skills
Bookkeepers are expected to work with accountants and other financial experts in financial departments. Obviously, they will all have to collaborate, which requires good communication skills. This way, goals are communicated quickly, and everyone is on the same page.
Attention to Minute Details
A bookkeeper has to deal with many financial details on a daily basis, so it’s important to pay attention to them so that errors are not missed. Even a small error in financial information can lead to huge financial loss for the client’s business.
Digital Literate
Gone are the days when bookkeeping was done manually, which was cumbersome and error-prone. These days, all bookkeeping is done by bookkeepers using accounting software and other digital tools. Accordingly, bookkeepers have to be well-versed with these tools to stay ahead of the game.
These days, bookkeepers working for bookkeeping service providers use digital tools and accounting software on a daily basis, and many accounting practices and businesses have outsourced bookkeeping due to access to digital experts at a lower cost.
Mathematic Skills
Every bookkeeper will have mathematical skills, but they need to be honed regularly to stay ahead of others. By regularly brushing up on mathematical skills, a bookkeeper is bound to commit fewer mistakes and produce accurate financial statements.
Problem-Solving Skill
Bookkeepers are expected to face financial challenges that they must overcome with problem-solving skills.
Time Management
Every task assigned comes with a deadline to complete, and bookkeeping tasks are also the same, and they require good time management skills from a bookkeeper.
Do Bookkeepers Make a Lot of Money?
The position of bookkeeper is quite respectable because of the responsibilities it has on its shoulders. Of course, bookkeepers are well-paid, but that depends on multiple factors such as experience, job, location, and specialisation.
To answer the question – Do Bookkeeper Make Lot of Money? an average bookkeeper in the UK is expected to earn 25,998 GBP per year. For inexperienced bookkeepers, the initial salary will be on par with accountants, but they can specialise their salary increases.
Conclusion
To sum it up, bookkeeping and bookkeeping are essential to any accounting practice and business. This blog aims to make you understand a bookkeeper’s importance, responsibilities, and skills required to do the job. This blog can guide you in selecting the best bookkeepers for your in-house bookkeeping team. But if you cannot handle the bookkeeping of your clients, then please do not hesitate to outsource to an accounting outsourcing service provider such as Corient Business Solutions.
We specialise in offering tailored accounting services for accounting practices. Our teams have vast experience in multiple payroll applications, such as Sage, Brightpay, Xero, Moneysoft, Earnie, and Star Payroll. Our payroll, year-end, VAT, and bookkeeping outsourcing services are designed to give your practice an edge in the market, thus saving you time to invest in other important tasks. We can connect at your convenience by phone or online meeting to discuss our services in detail.