- What does a bookkeeper do?
- What is the difference between an accountant and a bookkeeper?
- Is it OK using personal credit card/account to pay for business expenses?
- How do I pay myself?
- What do I need to do before our first meeting?
What does a bookkeeper do?
A bookkeeper is kinda like a detective. Similar to Sherlock Holmes, but nothing related to criminal crimes.
A bookkeeper is responsible for providing accurate and up-to-date financial information to the business owner.
Their tasks are, but are not limited to :
- Record financial transactions (income and expenses) and balance the books.
- Manage account receivable (creating invoices and make sure your clients pays them) and account payable (make sure vendors’ invoices are accurate and pay them on time).
- Handle bank reconciliations every month by cross-referencing the financial information in the books against bank & credit card statements, and other sources like Paypal.
- Provide monthly reports summarizing the business’s financial position.
- Make sure the accountant have accurate financial information and statements when tax time
A bookkeeper main goals are to give business owners more time to focus on growing their businesses, relieve any worries and tensions so owners can have peace of mind that their books are in order and tax season won’t be a hassle for them, and provide accurate financial information for owners to help them make smarter budgeting decisions.
What is the difference between accountant and bookkeeper?
When I first started as a bookkeeper, I heard constantly: “what does an actual bookkeeper do?” & “Oh so you are like an accountant basically, right ?”
I understand the confusion because we have similarities, but bookkeepers and accountants support different stages of the accounting process.
So what the heck do we do?
Bookkeepers focus on recording the daily financial transactions (i.e. invoicing, tracking/categorizing/recording all expenses and income, paying bills, reconciling bank and credit card accounts, generate monthly financial statements, and process payroll) and keep the records up to date. Bookkeeping can be simple or complex depending on the type & size of a business, and the number of transactions done daily, weekly, and monthly. Bookkeepers help business owners with these financial administrative tasks so owners can focus on growing their businesses.
Accountants focus on using the financial information compiled by the bookkeeper or business owner to review financial statements and accounts balances, review/audit accounts balances, prepare adjusting entries, prepare a financial analysis of the overall business, and complete annual tax returns. Accountants’ main goal is to look at the big picture of the business and help owners with creating a financial plan to grow their businesses.
Business owners benefit from having a bookkeeper and/or accountant to help them grow their company and make better business decisions moving forward.
Is it OK using personal credit card/account to pay for business expenses?
PLEASE NO DON’T! *scary music playing in the background*
I know that most folks feel like it is easier to just have one bank account and credit card, and just manage all their personal and business transactions together.
Personally, I think it is best not to. It will reduce headaches and reduce the risk of confusion, especially during tax season.
If you do have to use your personal credit card/account to pay for business expenses, please use them seldomly. And when I say seldomly, in my perfect world it would be once a year.
How do I pay myself?
This is a really good question!
It depends on the frequency of your revenues and the amount of your expenses.
The strategy I like to use is when I get paid by a client, I will automatically put aside money for my expenses for a few months, put 30% away for tax withholding (planning ahead for taxes), and then the leftover amount will go to paying myself. I like this strategy because it is easier to record it on Quickbooks.
What do I need to do before our first meeting?
My first tip would be to breathe 🙂 I know talking about finances can be daunting, scary, and sometimes there is a bit of shame. As a bookkeeper, I am not here to judge you at all. I am here to help you and relieve you of your worries.
My next tip would be to gather the information that I would need to know. Here are a few questions I would ask :
- Your business name & type of entity (i.e. solo proprietor, corp., etc…)
- When did you start your business?
- # owners in business & # owners having access to the business bank account
- Accounting system used
- If your books & tax returns up to date?
- # business accounts and credit cards?
- Any employees/subcontractors?
- How many transactions (income and expenses) do you do in a typical month?
- Are you using your car for business (i.e. visits clients, deliver products, etc..)? If yes, do you have a mileage log?
- Did you have a bookkeeper and/or accountant before?
- Future plans for your business?
Want to email CA Haché Bookkeeping?
christiane [at] cahache.ca | christiane@cahache.ca