What does a bookkeeper do?
A bookkeeper is responsible for keeping financial information accurate and organized and available to management, investors, and the IRS. To achieve these goals, a bookkeeper needs to:
- Enter & organize financial data
- Process payments and billing
- Oversee the inventory and cash flow
- Produce financial statements
Key elements for good bookkeeping are timeliness, familiarity with bookkeeping tools and spreadsheets, and the ability to process the information to produce these three main financial statements:
Income Statement
Balance Sheet
Statement of Cash Flow
Such statements measure a company’s strength as well as its ability to grow, pay its debt, and raise capital.
it is important to understand a few fundamental differences between a bookkeeper and an accountant, as they both serve a business in different stages of the financial process.
1. A bookkeeper is involved with day-to-day operations, while accountants come in to provide financial analysis.
2. A bookkeeper produces financial reports, while an accountant prepares them for review by various parties such as investors, the IRS, and the bank.
3. A bookkeeper makes sure that taxes are being entered correctly, but an accountant is the one responsible for filing them with the IRS, and communicating issues as they arise.