At the very core of any eCommerce business lies two concepts that are always there: earning money and spending it. While that sounds like an overly simplistic view of any business model, it is how every business works. The only question is, who keeps track of all of that? This is where bookkeeping comes in to help. Not many people understand what bookkeepers do except the fact that they’re somehow related to eCommerce accounting. Let’s break down what the role of a bookkeeper is and why it pays to have a competent one in your organisation.
What is a Bookkeeper?
A bookkeeper is basically someone who prepares your accounts, documenting daily financial transactions. It is a part of the accounting process that records and classifies all manner of transactions such as sales, payroll, payment of bills, among others. Whatever information or data was recorded by the bookkeeper will then be used by the accountant when providing insight and analysis on the business’s financial state.
It’s More Than Simple Data Entry
The primary responsibility of a bookkeeper is to record financial data. However, it’s more than just encoding numbers into spreadsheets. They are also responsible for ensuring that all the information recorded is correct and accurate to enable audits. Bookkeepers are also in charge of preparing documents like balance sheets, profit and loss statements, cash-flow statements, and other financial documents that are essential for the business.
Bookkeeping mainly focuses on maintaining a general ledger, but they also create reports for business loans being paid by the company. They take care of compliance requirements at the local, state, and federal levels so that the company does not get penalised at any point.
It is through the bookkeeper’s efforts that accountants and business owners are able to make informed decisions that would significantly impact the company and its future. Also, bookkeepers report any wastage of funds and overspending to the management, which keeps the financial balance of the business. All of the tasks of a bookkeeper affect almost every aspect of the accounting process, including:
Payroll Management
Reconciling Transactions
Monitoring Expenditure
Budget Forecasting
Ensuring Accurate and Timely Invoicing
Why You Need a Good Bookkeeper
Just like any outsourced position, hiring bookkeepers come with a cost, but they will more than earn their keep because of how crucial their role is in any company. Due to their attention to detail, bookkeepers are equipped to catch invoice errors and make sure bills are paid on time. This can save you a lot of trouble and money from unnecessary expenses. They are basically critical to maintaining a healthy cash flow and staying on top of your tax filings.
Conclusion
Bookkeepers and accountants work hand in hand to keep your business running smoothly. Every tedious but essential task you imagine an eCommerce accountant does actually fall on the shoulders of bookkeepers. On the other side of that coin are the accountants who come up with valuable insights based on the data provided by hardworking bookkeepers. In a way, they function as financial doctors constantly working to make sure that your finances are healthy.
The Ecommerce Accountant works with online stores and influencers to build a profitable business aimed at success. Through our simple but effective three-step approach to eCommerce accounting, we help online entrepreneurs minimise their taxes and increase their profits. Whenever you need eCommerce bookkeeping services, our team is always ready to assist you. Book a free strategy session today!