Is Bookkeeping Easy? The Long Task List of Bookkeepers

Running a growing business is a collective effort. You, as the owner, are the heart and soul of the company. Then there’s the operations team, the sales team, marketing, customer relations, the management, and so on. These individuals work tirelessly in various capacities, both physical and intellectual, to keep the business moving forward.

However, one hardworking person is often overlooked because of the silent nature of their work – the bookkeeper. A bookkeeper is, in fact, a strong pillar of any business. Working away quietly in the office, away from the hectic business operations, they do the crucial job of documenting, storing, and managing the finances of your business.

But how hard can filing papers and keeping ledgers be? Surely a bookkeeper’s job is the easiest in the company, right?

The Importance of Bookkeeping

The answer is NO. A bookkeeper undertakes a multitude of tasks, all of which require high concentration, punctuality, and a proactive approach. Any slip or error in bookkeeping can snowball into major setbacks for the business, including lost growth opportunities, unclaimed tax benefits, and even a CRA audit! Each bookkeeping task has a direct impact on the business’s operations. So, let’s take a moment to appreciate the long list of duties a bookkeeper undertakes to keep your business’s finances on track.

6 Bookkeeping Tasks Your Business Can’t Do Without

While the list of bookkeeping duties is quite exhaustive, we’ve summarized them into seven major ones:

Maintaining Financial Records

Business is all about numbers, and making sure every number associated with your business is duly recorded is the bookkeeper’s job. Operational costs, payments to suppliers, employee salaries, or refuelling the company vehicle, each penny that enters or exits the business has to be recorded. Moreover, these records must be systematically categorized under the correct headings – assets, liabilities, expenses, and revenue. – in the Books of Accounts. Most importantly, all these figures have to be backed by proof in the form of receipts, bills, and invoices to help you claim tax deductions. Imagine having to sequentially and logically file (and even maintain a backup of) every financial document, store it securely for years, and remember where it is stored in case the CRA ever raises a query… It’s hard work.

Helping With Budgeting and Cash Flow

For any business to sustain and thrive, it needs an optimistic yet realistic budget and a smooth cash flow that can underline rather than undermine its expansion ideas. For any such plans to take root, the business must ensure its resources are being optimally utilized, avoid overstocking inventory, and refrain from delaying payments and incurring more debt than it can manage. Based on this data, the accountant can then draw up a forward-looking budget. And where does the accountant get this data from? Of course, the bookkeeper.

The bookkeeper also tracks the execution of the budget by mapping actual expenses and comparing them with the allocated budget. If there is a deviation, the bookkeeper highlights it, helping your business implement budgeting effectively.

Generating Vital Financial Reports

Having all business financial records under their care adds another task to the bookkeeper’s list of duties. They compile financial reports tailored to various business requirements, including shareholder meetings, potential shareholder presentations, business forecasting, trend analysis, and more. Not only do these reports help you make informed decisions on future growth plans, but they also keep you updated on potential cash crunch, enabling you to take any remedial steps where required.

Tracking Business Expenses

A good bookkeeper has a trained eye for any gaps or discrepancies in business numbers. Since they regularly update and maintain financial records, it becomes easier for them to track your expenses. The bookkeeper can give effective insights into which areas are proving to be expensive for the business and where expenses can be trimmed.  

Reconciling Bank Records

Recording financial figures is one thing, ensuring all your financial statements and ledgers tally with each other needs extra effort. And that’s also a part of the bookkeeper’s job. Reconciling company records with bank statements is an excellent method of ensuring there are no gaps or errors in your books of accounts. The bookkeeper does this regularly to identify any discrepancies or potential scam attempts. Addressing these gaps promptly can save you a significant amount of time and money before they snowball into a major issue.

Ensuring Compliance with the CRA Requirements

Tax season gives everyone chills. A trained bookkeeper can produce all the numbers and documents required by the CRA for taxation purposes in the said format. Knowing that any mistakes or oversights may lead to a CRA query and audit would make anyone nervous. And, in case such a query arises, it is the bookkeeper’s job to find and present the required documents to the CRA. And this is only when tax season comes knocking. For the rest of the year, the bookkeeper also manages payroll and employee-related details, including tracking wages, deductions, employment insurance, and the Canada Pension Plan. All this information has to be duly relayed to the CRA within the stipulated time to avoid penalties. Thus, the bookkeeper has to have knowledge of the CRA’s rules and regulations and ensure that all financial activities comply with the rules.

An efficient and reliable bookkeeper can be a game-changer for any business. While the job description of a bookkeeper seems dull, they lay a firm foundation for you to build and grow your business. Without their expertise, your business would be vulnerable to significant financial losses and fraud. A little technological assistance, organizational support, and regular monitoring in your capacity as a business owner are what your bookkeeper needs to help encourage your business to grow in the right direction.

Contact KSSP Partners LLP in Markham to Help You with Your Bookkeeping Needs

Talk to a professional bookkeeper to help you record the transactions, implement the budgets, track business performance, and comply with the CRA’s documentation requirements. To learn more about how KSSP Partners LLP can provide you with the best bookkeeping and cloud accounting expertise, contact us online, or by telephone at 289-554-5997.