What’s Bookkeeping ?
Bookkeeping is the recording of financial transactions and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation. There are several standard methods of bookkeeping, such as the single-entry bookkeeping system and the double-entry bookkeeping system, but, while they may be thought of as “real” bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.
Bookkeeping is usually performed by a bookkeeper. A bookkeeper (or book-keeper) is a person who records the day-to-day financial transactions of a business. He or she is usually responsible for writing the day books, which contain records of purchases, sales, receipts, and payments. The bookkeeper is responsible for ensuring that all transactions whether it is cash transaction or credit transaction are recorded in the correct day book, supplier’s ledger, customer ledger, and general ledger; an accountant can then create reports from the information concerning the financial transactions recorded by the bookkeeper.
Who’s a Bookkeeper?
A bookkeeper is someone who produces financial records for businesses or organizations. They record financial transactions, update statements, and check financial records for accuracy. Bookkeepers are employed in many industries, including firms that provide accounting, tax preparation, bookkeeping, and payroll services. They are also employed in various levels of government and schools. Bookkeeping in Sri Lanka
What do bookkeepers do?
Here are some of the tasks a bookkeeper will perform to help keep your business running smoothly:
Keeping track of daily transactions
A bookkeeper can handle the recording of day-to-day bank transactions. If the accounting software you use has daily automatic bank feeds, this is a great tool for your bookkeeper to use. When your bank statement lines are fed into your accounting software, it’s much easier to keep an eye on cashflow, and it also saves time on data entry.
Sending invoices and managing the accounts receivable ledger
Preparing invoices and sending invoices to clients is usually the bookkeeper’s job. Managing the accounts receivable ledger – and chasing late payments – is also likely to be done by your bookkeeper.
Handling the accounts payable ledger
Up to a certain amount, it’s usually bookkeepers who will make any payments on behalf of the business. This includes payment of supplier invoices, expenses and petty cash.
Keeping an eye on cash-flow
One of the most important tasks for a bookkeeper is making sure the company doesn’t run out of money day-to-day. They can do this by monitoring the balance of revenues to expenses. Then they can take action, or offer advice if it looks like the business needs more ready cash.
Preparing the books for the accountant
It’s the bookkeeper’s job to make sure that accounts are valid and up to date when the accountant needs them. This allows the accountant to use their skills and knowledge to make business recommendations, report to the board, and complete company tax returns.
Accountants and bookkeepers have different jobs and responsibilities. Your accountant’s main focus is:
- the preparation and lodgement of statutory returns
- advising on legal entity structures
- giving general business and financial advice
Accountants are usually members of a statutory association. Qualified and registered accountants might call themselves ACCA’s (Chartered Certified Accountants), CA’s (Chartered Accountants) or other titles.
Bookkeepers can manage lots of different responsibilities within a small business. But the main focus is organizing, recording and reporting financial transactions as part of the operational life of a small business. In more recent times, some bookkeepers have extended their range of duties to include:
- training clients to use accounting software
- implementation of document management and inventory control processes to create efficiency within the business
- implementation of POS (point of sale) systems that capture the daily transactions in a retail environment
- development, implementation, maintenance and review of internal business processes
You will often find that a bookkeeper has an area of specialization, and it’s a good idea to ask them more about this when you are looking at hiring them for services and bookkeeping in Sri Lanka.
Does the Bookkeepers and accountants are same?
The financial side of maintaining a business can be precarious like no other region – now and then you’ll need to counsel a specialist. Bookkeepers help you to keep your accounts all together, however, accountants assume an essential part as well. So what are the contrasts between an accountant and a bookkeeper? What’s more, in what manner can an accountant help you to maintain your business?
In case you’re an entrepreneur, you’ll be acquainted with juggling different errands. And keeping things running you have to produce income, keep clients glad, and take care of the financial. Following financial can be an errand however, and one of the greatest inquiries you may have is who you get the opportunity to help with your records. Do you require a bookkeeper, an accountant or both? Let’s start by clarifying a few things.
Five ways that a bookkeeper can help your business
If you run a very small business, you might be the bookkeeper – at least until you can afford to hire someone to do the work for you. Once your business reaches a certain size, it will start to make sense to have someone do the bookkeeping for you. Here are five ways that a bookkeeper can help:
Allows you to concentrate on business strategy
Bookkeeping involves tracking fine detail and recording it in accounts software. Working with these numbers can sometimes make it hard to see the big picture. So it’s usually better to have someone else do this work.
Reduce your accounting costs
Are you using an accountant to manage daily transactions and run monthly payroll? If so, you could save a lot of money by having a bookkeeper do this work instead.
Have an extra pair of eyes watching your cash-flow
If you want to avoid running out of money suddenly, you need to actively monitor your cash-flow. We’ve discussed this in our guide to managing cash-flow. It helps to have someone else checking the numbers, making sure your cash keeps flowing, and a bookkeeper can do that.
Get quick access to vital figures
Having an accountant manage your monthly business reconciliation and reporting is important. But what if you need financial information part-way through the month? Bookkeepers can give you the insight you need quickly, without you having to wait for your accountant to respond.
Keep control of your financial data
Few small businesses can afford to hire their own accountant, so most accountants work on a part-time basis for their clients. If they use quality online accounting software to manage financial, it makes collaboration much easier. Good software allows bookkeepers work on the same set of data as the accountant. They can both work together to deliver the best outcome and help your business grow.
OCR Offer Bookkeeping Services
Businesses are often under intense cost and time constraints and find it difficult to take complete control over their critical finance processes. One such process is bookkeeping, which keeps a track of total earnings and expenses of a company. Efficient bookkeeping services provide a clear picture of total earnings and help in taking important business decisions that take the company forward. Having an in-house bookkeeping & accountancy team can be cumbersome and expensive. It is better to outsource bookkeeping services to an experienced third-party service provider. OCR has been providing top-quality professional accounting and bookkeeping services in Sri Lanka to client. We take care of all your accounting and tax preparation processes and also provide efficient bookkeeping services at reasonable rates.
Being in the financial industry, we have a team of financial experts who understand the exact needs of our clients and provide the services accordingly. We help businesses keep a track of their income and expenditures at a fraction of the price.