Think bookkeeping is just entering transactions into Xero? There’s a lot more happening behind the scenes!
Many business owners know they need a bookkeeper, but not everyone understands exactly what a bookkeeper does or how much of a difference good bookkeeping can make.
While recording transactions is part of the job, bookkeeping plays a much bigger role in keeping your business organised and financially healthy.
So, what does a bookkeeper actually do?
A bookkeeper helps manage and maintain your business’s financial records throughout the year.
Depending on your business, their responsibilities may include:
• Bank reconciliations: Making sure the transactions in your accounting software match your bank statements.
• Payroll processing: Managing employee wages, payslips, PAYG withholding, superannuation and payroll reporting.
• Accounts payable: Keeping track of supplier invoices and upcoming payments.
• Accounts receivable: Monitoring customer invoices, outstanding payments and overdue accounts.
• BAS preparation: Preparing and reviewing financial information needed for Business Activity Statements.
• Transaction reviews: Checking that income and expenses are recorded correctly.
• Financial reporting: Helping you understand your income, expenses and cash flow throughout the year.
• Record keeping: Making sure important financial information is organised and accessible when needed.
A good bookkeeper doesn’t just record what’s happened. They help keep your financial information up to date so you can understand what’s happening in your business.
Why is regular bookkeeping so important?
Imagine you’re running a business turning over $800,000 a year.
You’ve got employees to pay, suppliers to manage, invoices coming in and money going out every day.
But your bookkeeping hasn’t been updated for three months.
How do you know whether you’re making a profit?
How much do customers still owe you?
Are your expenses increasing?
Do you have enough money set aside for upcoming payments?
Without accurate and current records, answering these questions becomes much harder.
You might have plenty of work coming in, but that doesn’t necessarily mean your business is performing as well as you think.
Good business decisions start with accurate information.
When your bookkeeping is up to date, you can make decisions based on what’s actually happening rather than relying on your bank balance or guesswork.
Regular bookkeeping can help you:
• Understand where your money is going
• Keep track of outstanding customer payments
• Identify rising business expenses
• Monitor your cash flow
• Prepare for tax and superannuation obligations
• Make more informed business decisions
• Reduce stress when reporting deadlines approach
It can also help you identify small issues before they become much bigger problems.
What happens when bookkeeping falls behind?
When financial records aren’t maintained regularly, small tasks can quickly turn into a major clean up job.
Transactions become harder to identify, receipts go missing and bank reconciliations pile up.
By the time your accountant starts preparing your financial statements and tax returns, there may be months of information that needs to be reviewed or corrected.
This can create delays, additional costs and unnecessary stress.
Keeping your bookkeeping up to date throughout the year makes the entire accounting process much smoother.
What’s the difference between a bookkeeper and an accountant?
Although bookkeeping and accounting work closely together, they serve different purposes.
A bookkeeper focuses on maintaining accurate financial records and keeping the day to day financial side of your business organised.
An accountant uses that information to prepare financial statements, manage tax obligations, provide advice and help you plan for the future.
For example, your bookkeeper might identify that your business expenses have increased significantly over the past few months.
Your accountant can then help you understand how those rising costs are affecting profitability and what changes you could consider.
Both roles are important, and they work best when they’re connected.
How can PLH Accountants help?
At PLH Accountants, we offer bookkeeping and accounting services to help business owners stay organised, understand their finances and make confident decisions.
Our bookkeeping team can assist with everything from bank reconciliations and payroll to BAS preparation, reporting and ongoing financial support.
Working closely with our accountants also means your financial information can be used to provide meaningful advice, rather than simply being reviewed once a year at tax time.
Whether you’re struggling to keep up with your bookkeeping or simply want more time to focus on running your business, we’re here to help.
Because bookkeeping keeps your numbers organised, but accounting helps you understand what those numbers mean.
And when both work together, you’re in a much better position to grow your business.