What is a Book Keeper?
A bookkeeper’s role within a company is to process and record financial transactions that have occured within an accounting period. Bookkeepers prepare accounts for review by accountants or higher management and these accountants or management adjust entries as needed before distributing financial statements. A bookkeepers’ role varies depending on the size of the company, but in small companies bookkeepers can expect to:
- Process business transactions.
- Prepare billing and follow up on accounts receivable.
- Manage cash.
- Process payroll.
- Preparing and adjusting entries.
Bookkeepers are responsible for preparing the following financial statements:
- Income Statement: Financial document that shows a company’s revenue in comparison to their expenses.
- Balance Sheet: Financial document showing a company’s financial position.
- Cash Flow Statement: Financial document showing inflows and outflows of cash from a company
- Statement of Changes in Equity: Financial document showing how a company’s retained earnings, reserves, and capital have changed from a previous accounting period.
Bookkeepers vs. Accountants
Bookkeepers may feel as if they are doing the role of an accountant due to processing and recording financial transactions. Bookkeepers have an understanding of finance, but may lack some of the technical skills that accountants posess such as interpreting financial statements. Bookkeepers record and process daily financial transactions that are then used by accountants to interpret this data and prepare financial statements based on their findings and interpretations .