What Is Bookkeeping and Why Do I Need a Bookkeeper?

Whether you’re a small business, sole trader, company, or other, you can benefit from bookkeeping. If you’re new to the business, i.e., have just embarked on your first business venture or gone out on your own, then you may not be very familiar with the role of a bookkeeper and whether you need such a service.

Today we address two of the most commonly asked questions we receive here at Grow Advisory Group; What Is bookkeeping, and why do I need a bookkeeper? As accountants, we have a dedicated team of bookkeepers that play a pivotal role in many of our client’s businesses If you’re looking to kickstart your business the right way, this article will be beneficial to you.

Continue reading to discover what booking is, and why it pays to invest in a bookkeeper.

What Is bookkeeping

Let’s kick things off by defining what precisely bookkeeping is. Bookkeeping is the process of recording and analysing the financial transactions of a business or individual. This may include, but is not limited to, the preparation of sales invoices, vendor invoices, payroll, and other transactions, along with adjusting entries. Other duties include management of accounts receivable, accounts payable, cash, sales, rent, salaries etc.

Now, you may ask, what’s the difference between bookkeeping and accounting, then? Well, there is quite a difference. Bookkeeping is the process of recording financial statements, and accounting is the process of recording, summarising, and analysing financial transactions. Effectively, bookkeeping affects how an accountant interprets a company’s financial information, for which they base their advice and recommendations.

It’s also worth mentioning that accountants can call themselves bookkeepers, but bookkeepers cannot call themselves accountants – unless they have the relevant education and certification.

Why do I need a bookkeeper

Now that you know what bookkeeping is and have a clear understanding of how it differentiates from accounting, let’s explain why a bookkeeper is beneficial to your business.

As mentioned, bookkeepers keep a record of all financial transactions of a business. And yes, while you can do that yourself, there are many reasons why you shouldn’t. Below, I will list just some of the many benefits of hiring a professional bookkeeper:

• Leaves you to focus on what you do best: Whether you’re a café owner, mechanic, lawyer, manufacturer, etc., one thing you’re not is a bookkeeper. There aren’t enough hours in the day to properly manage your books and business. With a bookkeeper, you are free to focus on what it is you do best, which in turn, will help your business grow.
• Prevents any compliance issues: As a business owner, you are not expected to know the latest laws and regulations in regards to tax, which can easily lead to penalties. A bookkeeper can rest assured knowing all reports are submitted on time and in compliance with the latest regulation.
• Build better relationships: One sure way to spoil any relationship is insufficient funds. Whether it’s a relationship with a supplier, bank, or investor, a bookkeeper will ensure these relationships a nurtured. They will ensure suppliers are paid on time and that you’re in the best position to receive a loan from a bank or investor.
• Allows you to make wiser financial decisions: It’s hard to grow your business with no figures or reports to base decisions on. With a bookkeeper, you will have a better understanding of your cash flow and be able to make smart decisions that align with your business goals.
• Provides you with instant, detailed reporting: You can’t always wait till the end of every quarter or EOFY to see how your business is performing. A bookkeeper can pull up instant reports on the health of your business so you can make changes before it’s too late.

Conclusion

If you have just started trading, or are about to embark on a new business venture, then you can benefit significantly from bookkeeping services. Bookkeeping itself is the process of recording all financial transactions of a business, which are used by accountants for advice, recommendations, and tax.

While you can do bookkeeping duties yourself, it really does pay to invest in a professional bookkeeper. A professional can help you focus on managing the business, not the books. They can prevent penalties and compliance issues and help you build relationships with suppliers, banks, and lenders. Best of all, they can provide instant, detailed reporting on your business at the drop of a hat so you can make smarter business decisions.

If you would like to invest in a professional bookkeeper or need help getting your bookkeeper set up, Grow Advisory can help. We offer a vast range of bookkeeping services to aid businesses just like yours on the Gold Coast and Tweed Heads.

Contact us today to see how we can help!

Disclaimer: The information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from an accountant and/or financial adviser.