The term 'Bookkeeper' is included in the Accounting edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Choose your edition here...
A bookkeeper is an individual who maintains a business’ important financial records. These are typically kept in journals or ledgers format. This is where the word books derives from, which is used in the title of bookkeeper.
Although bookkeepers typically engage in basic levels of accounting tasks, they are still not labeled as fully qualified accountants. This is because bookkeepers are given substantially less amounts of training than are accountants. On top of this, bookkeepers do not have the requirements of legal certification applied to them. Bookkeepers could perform their duties as employees of a single business. They might also become a small sole proprietorship, working on the behalf of several small groups or individuals. In such a capacity, bookkeepers actually keep the books of a number of different clients at a time.
An individual who labors as a bookkeeper has important responsibilities. They must dutifully record each and every financial transaction in which a business engages. Bookkeepers make notes of every payment received or made, and for what each of these amounts represented. Monies that are both spent and received have to be carefully tracked. All entries placed into the ledger books have to be balanced at the end of the period, so that a company’s expenses and income are accurately and precisely detailed in the accounting.
Bookkeepers are not expected to do all of the financial tasks of a business. When an accounting period that is either a quarter or a month is reached, they will often carry the books over to a qualified accountant. Such an accountant will handle the tasks of figuring up the taxes that need to be paid to the IRS. They also create official accounting reports. There are a number of larger or mid-sized firms that simply engage their own accounting staff and accountant rather than have a bookkeeper as well. This is generally considered to be more efficient financially. Smaller companies will tend to have their own bookkeeper on staff then engage an accountant on a basis of need. Such accountants are generally used for reporting taxes, as well as profits or losses.
Bookkeeping tasks, like with accounting, can become very complicated. This is especially true as companies expand. Capable bookkeepers are able to work flexibly, handling a constant barrage of data and even unexpected issues. A reliable bookkeeper will also have to possess people skills. This is because bookkeepers actually interact with other employees through the company to make certain that the company is able to keep track of every expense, ranging from ink and paper for the copy machine to hotel stays for business related to work.
Bookkeeping can occasionally involve a bookkeeper in activities that are against the law, like with creating incorrect records on the ledgers in order to make a company look to be in better financial health than it truly is. When this happens, it is casually referred to as cooking the books. No only is such activity in bookkeeping immoral, but it is highly illegal.