The bookkeeping function is an essential role in any business. The function of a bookkeeping is to record the financial activities of the business. Essentially this means that the bookkeeper records: invoices, receipts, payments, and bills. Essentially they will record all transactions that can affect the ledger of the business. A more advanced bookkeeper can also performing accounting functions and prepare financial statements. In some smaller or medium sized businesses the bookkeeper and accountant may actually be the same person.

What does a bookkeeper do?

The role of a bookkeeper can take many forms, but in general they are a record keeper. As a record keeper the bookkeeper will spend their time inputting data entry items into the accounting system, or Quickbooks. The bookkeeper typically will:

  • Use bookkeeping software, spreadsheets, and databases
  • Input financial transactions into accounting system like Quickbooks
  • Receive and record cash, checks, and vouchers
  • Some bookkeepers prepare financial statements
  • Reconcile and correct input errors
  • Input debits and credits into accounting software, post to account

Creating the Balance Sheet

As the bookkeeper inputs the financial entries into Quickbooks, or your other accounting software, the is how the financial statements are created. For example, with each sale the bookkeeper will record the invoice and the cash receipt. These transactions will populate the journal entries and be recorded into the ledger. The ledger entries will be summed for the company over a period, like a month, and thus create the balance sheet. This similar process will be used to create the income statement and cash flow statement. These statements are simply reports that can be run after the bookkeeper finishes their work. Sounds easy? Well it can be if you use Quickbooks as we suggest. It is the perfect accounting software for the small business.

What is your industry?

In just a few easy clicks, Quickbooks will be able to setup your new business file. During the setup process, the software will ask you questions about what your business, your industry, and other general questions. With this data, it can start to create the file, and populate the accounts for you automatically. If you have a law firm, it will setup all of the necessary accounts, and configure the software optimally for this type of business. It is really helpful and makes the process much easier.

Quickbooks is easy to use for a Bookkeeper

The bookkeeper can have a certain login to your business file, thus limiting what you want them to do. When I had my previous business I simply shared one admin login with my bookkeeper. The shared login made it easier, and I trusted the bookkeeper and they helped with doing some more advanced procedures.