One of the most critical tasks for any organisation is maintaining accurate financials. It is essential to account for every pound of income, expenses, and payroll paid on time, and tax obligations need to be met.

As the new year starts and the tax season arrives, many company owners have the bottom line on their minds. We’ll explore what bookkeeper do and guide for business owners looking to hire one.

What is a bookkeeper?

A bookkeeper maintains a record of the day to day business transactions. Besides record keeping, a bookkeeper can create invoices, chase customer, and do other admin work.

What is the role of a bookkeeper?

The primary responsibility is to record all income and expenses and make sure those transactions are accurately represented in your company’s books. They also:

Keep a track record of purchases, sales, receipts, payments.
Data entry and review of internal business processes
Bank accounts reconciliation.
Mailing and following up on invoices.
Managing creditors or accounts payable.
Credit control function.

Bookkeeper VS Accountant

Bookkeeping is an essential service, but how it is different from accounting? People usually compare these two services, but actually, they are complementary:

Bookkeepers do the day-to-day work and bring a high standard of detail and accuracy to the accounts. They can also advise you on problems that could affect you shortly, such as cash flow issues or late payment invoices.

Accountants prepare financial reports based on the work done by bookkeepers. Accountants prepare cashflow reports, manage the company’s cash flow positions, find alternate finance sources, prepare annual and management accounts, prepare tax reports, represent the company in dealings with HMRC, and the list goes on.

Types of bookkeepers

Before hiring one, you must decide what type of bookkeeper meets your business needs. Consider the choices below:

In-house Bookkeeper

Hiring an in-house full time bookkeeper is perfect if an individual has a medium-size company and want to keep a record of the bookkeeper’s day-to-day duties.

Freelance Bookkeeper

Consider using a freelancer when an individual only needs a bookkeeper to consolidate their accounts once or twice a year. Generally, these independent bookkeepers charge an hourly rate that varies or based on their experience.

Agency Bookkeeper

Large corporations often use agencies to administer their budgets, but small and medium-sized firms sometimes take this path. The price of using these agencies depends on what type of service you need.

Outsourced Bookkeeper

An individual can outsource their bookkeeping duties to an organisation that will set up and train a dedicated team for your business and cover all the costs necessary for their job. These assets include billing reminders, accounting software, as well as the office space where they will perform their work.

What factors are a business owner looking for at the time of hiring a bookkeeper?

When selecting a bookkeeper, here are several factors to consider:

Your bookkeeper, particularly among clients in your industry, must be able to demonstrate a track record of success.
There should be some certification for a trustworthy bookkeeper, although legal requirements are not as strict for bookkeepers as they are for accountants.
While much modern bookkeeping is done online and thus encourages remote work, holding occasional in-person meetings with your bookkeeper can be wise. As an individual may want to restrict their search to bookkeepers in their nearby area or location.
When a short-list of bookkeepers is narrowed down, you can:
Study their previous record of work.
Communication and speak with their referees.
Ensure the bookkeeper is open to accountability measures, such as daily bookkeeping reports, the use of project management software and prior permission for certain bookkeeping activities. These controls seek to ensure that your books represent your finances correctly and thus do not lead to tax time issues.

Winding-up

As we have discussed in this guide, a bookkeeper plays a very significant role in a business and can provide more services than just financial recording and enforcement.

A bookkeeper will also specialise in a specific industry, so it is advisable to ask them about this to add more value to your business. Ensure individuals get the most out of their business by hiring a bookkeeper in London to support them in their journey by embracing new technology.

Sophia is a full-time financial writer at experlu. she is a passionate blogger and love to share her knowledge on various subject. Content created by Experlu– are loved, shared & can be found all over the internet on high authority platforms.