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What Does a Bookkeeper Do? 11 Most Common Duties


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what does a bookkeeper do


Growing a business means understanding the financial health of your company, and then making decisions that support expansion. The problem for many small businesses is that taking care of the financials is time-consuming. Too many business owners wait until tax time or when they need updated financials for financing to address their bookkeeping. Having to rush means risking errors or missing transactions altogether.

What could be your company’s best line of defense? Having a bookkeeper who can manage your transactions, and keep your financials updated and accurate. So what does a bookkeeper do, and how are they different from an accountant? Let’s start by getting a quick overview of bookkeeping.


What Is A Bookkeeper?

A bookkeeper is a person who records the accounts or transactions of a business. The word comes from bookkeeping, which means the process of keeping records. Their primary goal is to accurately categorize and record all the transactions related to your business, including income and expenses. You might be thinking to yourself, “But my accountant can do that.” While there can be some overlap of duties, there are also major differences between bookkeepers and accountants.


How Is a Bookkeeper Different from An Accountant?

Bookkeeping and accounting are both related to the financial management of a business, but they have some key differences. Accounting is the process of analyzing and interpreting the financial data recorded by bookkeeping, such as preparing financial statements, tax returns, audits, and other reports.

Bookkeeping, on the other hand, is the process of recording and organizing the daily financial transactions of a business, such as sales, purchases, payments, and receipts. Bookkeepers usually need less education and certification than accountants, who often have a degree or professional license.

Your bookkeeper is focused on the details of the transaction, while your accountant works to understand the implications of the financial data being presented to them. Think of your bookkeeper as a preliminary function, while your accountant serves more of a supervisory function.

That being said, in many businesses, the role of bookkeeper and accountant can overlap. Let’s dive into the specific jobs typically done by a bookkeeper within a business setting.


What Does a Bookkeeper Do?

While your bookkeeper might handle additional duties, these 11 tasks frequently fall under the bookkeeper’s duties. Let’s explore what each one means and how they support the business overall.

1. Day to Day Management of Accounts

Day-to-day management of accounts refers to the regular tasks that are performed to keep track of a company’s financial transactions. These tasks include recording sales and purchases, reconciling bank accounts, managing cash flow, and preparing financial statements. It is important to keep up with these tasks on a daily basis to ensure that your company’s books are accurate and up-to-date.

2. Keep Records Updated

To make sure all reports are accurate, the records need to be regularly updated. As transactions come in, they need to be recorded and categorized so financial reports reflect the current reality of your business in terms of assets and available cash, and even highlight trends.

3. Keep Businesses Aligned With Laws

To stay in compliance, you need accurate and up-to-date records that can be filed with the appropriate agencies. Your bookkeeper assists in this process by giving your accountant the right numbers to complete any filings that might be required at the local, state, or federal levels.

4. Keep You Prepared for Tax

Along with keeping you in compliance, having accurate and updated financial records means that your accountant will have all the information necessary to complete your tax filings. Depending on your business model, you may have regular filings that need to be completed throughout the year, including quarterly tax payments. Then there are sales tax payments, which must be submitted on a regular schedule. Having your bookkeeper record and categorize transactions is key to making sure those taxes are paid promptly to avoid potential fees and penalties.

what does a bookkeeper do

5. Handle Accounts Payable

Part of your bookkeeper’s duties can include tracking and paying invoices. As liabilities are bought on credit, your bookkeeper can manage due dates for invoice payments, including payment terms. When payments are due, then they are considered invoiced. Making on-time payments can have a positive impact on your company’s credit score, which can have an effect on financing terms.

6. Send Out Invoices and Manage Accounts Receivable

To make the payments for your accounts payable, you also need to collect payments from your customers, especially if you are offering payment terms. An invoice is issued after the order is delivered and fulfilled. This is recorded as an asset on your balance sheet. Managing both accounts payable and accounts receivable is the most essential of your bookkeeper’s responsibilities.

7. Prepare Financial Statements

On a monthly, quarterly, annually, or as-needed basis, your bookkeeper can format financial statements, which can be used by your accountant to analyze your current financial position.

8. Process Payroll

Paying your employees is an essential part of your business and includes calculating more than just their hourly rates and handing them over. You need to meet certain tax requirements, including the schedule, calculate net and gross wages, and calculate, file, and pay payroll taxes. Your bookkeeper can do this manually, with your accountant, or using payroll software.

9. Deal with Foreign Currency Transactions

If your business has multiple international transactions, then your bookkeeper needs to be able to translate all foreign currency items into the business’s functional currency. They should record the rate of exchange on the date the transaction occurred and then record the gains and losses of the translation between currencies. Then they will record the value of the transaction in dollars at the exchange rate current at the time of purchase. After calculating the value of the payment in dollars at the exchange rate when the transaction was settled, your bookkeeper will post the payment and record any change in value.

10. Keep an Eye on Cash Flow

Cash flow management is one of the most basic tasks for your bookkeeper. Naturally, you should track money coming in and going out. This includes business expenses, invoices, donations, funding, sales, salaries, and more. This is important since it can demonstrate how much working capital you have to keep the business running.

11. Preparing the Books for an Accountant

Since the bookkeepers are involved in all the daily transactions and day-to-day operations, they would be preparing the books or gathering the financial data necessary for your accountant to complete any analysis or tax filing. Additionally, having the books complete and accurate allows you to have the best data to make informed financial decisions.


Frequently Asked Questions


Are bookkeepers responsible for budgeting and financial planning?

Bookkeepers are responsible for recording and maintaining financial transactions and providing updated information about a business. Some of the most common bookkeeper’s responsibilities include recording financial transactions, creating and sending invoices, preparing tax returns, and creating budgets and forecasts.


What software do bookkeepers use?

There are a variety of software options available, based on your business model. Quickbooks offers a number of options, and that software is also compatible with various payment applications.


How do bookkeepers ensure data security and confidentiality?

To maintain the security of your financial data, your bookkeeper should implement a VPN, install anti-virus software, run regular data backups, encrypt sensitive data, set employee access levels, require multi-factor identification, and maintain strong passwords, which are regularly updated.


What qualifications or certifications do bookkeepers typically have?

These can vary based on the needs of your business. Typically, a bookkeeper should have a bachelor’s degree in accounting, finance, or a related discipline, along with previous bookkeeping experience. They should also be knowledgeable about industry benchmarks and accounting standards and frameworks.


Do bookkeepers work independently or as part of a team?

Bookkeepers can work independently or as part of a team, depending on whether you opt to hire a bookkeeping service, one freelance bookkeeper, or hire a bookkeeper in-house.


What Is AccountsBalance?



AccountsBalance is a monthly bookkeeping service specialized for agencies & SAAS companies.

We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.

You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.

Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.

And here’s some free resources:


In Summary

Your bookkeeper provides a critical function for your business. With their experience and expertise, your bookkeeper makes sure your financials are accurate and up-to-date. They also check for potential errors. But as you have seen, a bookkeeper can assist in many other areas of your business, helping to manage payments, invoicing, payroll, and more. Knowing what a bookkeeper can handle will help you determine what your business needs and the role your bookkeeper can play.


Want help with your bookkeeping? We make it easy. Get startedSpeak w/ a Founder, or Schedule a Callback

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Tracy Knepple

Tracy Knepple

As a writer and editor with 20+ years experience, Tracy Knepple offers practical tips and analysis on accounting, bookkeeping, small business, and many other topics. She has authored over 100 books as a professional writer for the Raymond Aaron Group. She received her Bachelor's degree in Communications from Indiana University.

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