Quite often when one hears the word 'bookkeeper', they automatically think 'accountant.' However, the job of a bookkeeper differs in scope in comparison to that of an accountant. There are many functions that they can perform, usually at a lower rate than that of a CPA. If you are unsure what they can do and not do, just ask a bookkeeper.
Both accountants and bookkeepers follow the steps in the accounting cycle. This cycle is completed each accounting period. An accounting period can be a year, six months, or one month, depending upon the size of the business. Most keep their books according to the accrual method, which is a more accurate representation of the true nature of the company's finances. The cash method can also be used, but this does not accurately reflect when revenue is earned or when money is spent.
The accrual method uses double-entries to record transactions. This is by far the most difficult concept to learn in this field, other than debits and credits! The accrual method can also show a profit on paper when a company is cash poor, so one should look at the financial statements as a whole to get an accurate picture of the company's fiscal fitness.
Bookkeepers usually perform the first three steps in the cycle, the latter steps are often the accountant's responsibility, but there can be some crossover, especially in some small businesses. Sophisticated accounting software has made it easier for almost anyone to create financial statements and perform analysis. However, those with little business savvy may want to leave this to the pros.
The first step in the cycle is to analyze each business transaction. Most transactions involve an exchange of money or credit. Then, these are journalized in the general journal and sometimes special journals, such as cash payments. Once journalized, they are posted in the general ledger or other subsidiary ledgers. The accountant will then take over and complete the cycle, which includes a worksheet, a trial balance, and the associated financial statements. The accountant or CPA is also tasked with interpretation of the financials and communication with management.
Bookkeepers can have other duties in the company. The might be responsible for reconciling the bank statement, billing customers, and paying invoices. They could keep track of the petty cash fund, make deposits, or even cut payroll checks. They may be responsible for compiling a budget based on past expenditures.
They can also be in charge of office supplies and equipment. Part of that job is monitoring inventory levels and replenishing supplies as needed. They might also have authority to purchase copiers, computers, printers, and other items vital to the health of an office.
Often bookkeepers have a lower level of education than a CPA or accountant, they can also get hired just based on business acumen or experience. They must be familiar with GAAP, which stands for generally accepted accounting principles. They must be very organized and pay close attention to details. A good bookkeeper equals a good business.
Both accountants and bookkeepers follow the steps in the accounting cycle. This cycle is completed each accounting period. An accounting period can be a year, six months, or one month, depending upon the size of the business. Most keep their books according to the accrual method, which is a more accurate representation of the true nature of the company's finances. The cash method can also be used, but this does not accurately reflect when revenue is earned or when money is spent.
The accrual method uses double-entries to record transactions. This is by far the most difficult concept to learn in this field, other than debits and credits! The accrual method can also show a profit on paper when a company is cash poor, so one should look at the financial statements as a whole to get an accurate picture of the company's fiscal fitness.
Bookkeepers usually perform the first three steps in the cycle, the latter steps are often the accountant's responsibility, but there can be some crossover, especially in some small businesses. Sophisticated accounting software has made it easier for almost anyone to create financial statements and perform analysis. However, those with little business savvy may want to leave this to the pros.
The first step in the cycle is to analyze each business transaction. Most transactions involve an exchange of money or credit. Then, these are journalized in the general journal and sometimes special journals, such as cash payments. Once journalized, they are posted in the general ledger or other subsidiary ledgers. The accountant will then take over and complete the cycle, which includes a worksheet, a trial balance, and the associated financial statements. The accountant or CPA is also tasked with interpretation of the financials and communication with management.
Bookkeepers can have other duties in the company. The might be responsible for reconciling the bank statement, billing customers, and paying invoices. They could keep track of the petty cash fund, make deposits, or even cut payroll checks. They may be responsible for compiling a budget based on past expenditures.
They can also be in charge of office supplies and equipment. Part of that job is monitoring inventory levels and replenishing supplies as needed. They might also have authority to purchase copiers, computers, printers, and other items vital to the health of an office.
Often bookkeepers have a lower level of education than a CPA or accountant, they can also get hired just based on business acumen or experience. They must be familiar with GAAP, which stands for generally accepted accounting principles. They must be very organized and pay close attention to details. A good bookkeeper equals a good business.
About the Author:
When you are looking for information about how to just ask a bookkeeper, pay a visit to the web pages online here today. Details are available at http://www.justaskabookkeeper.com/About-Expert-Bookkeeping-Help.html now.
No comments:
Post a Comment