In 1. Managing Your Biz Numbers, 4. Doing Your CEO Job

What Does a Bookkeeper Actually DO?

If you own and/or operate a small business or deal with money at all in your life, you may have been advised to hire a bookkeeper. The good thing is that there are LOTS of bookkeepers out there, which increases your chances of finding the right one for you.

If you’re wondering how to find a good bookkeeper – not to mention a great bookkeeper – please consider all the many things a really skilled bookkeeper can actually do for you. People tend to think of us as humorless bean-counters better at numbers than human relationships, but a really great bookkeeper is capable of so much in support of your work and financial welfare. 

Getting started with a bookkeeper might mean that you break off the most immediate need, resolve that, then move on to something else. It can be a short, project-style interaction or maybe it’s a longer-term relationship.

For example, we often start our work with a new-to-us business owner by getting their books caught up for taxes. Once we get that sorted, then perhaps we work on making sure they have a clear sense of how they’re doing financially on a regular basis, monthly or quarterly, so they can make the best possible data-based & strategic decisions for their business. From there, we could move on to plotting out the future, projecting cash flows, building out what COULD happen. 

In short, a great bookkeeper is capable of a LOT in support of your work. We are your partner on the numbers, helping you really understand how (and if!) your business is really working for you, helping you build success on your terms. We are truly so much more than numbers-monkeys!

So, how can a great bookkeeper assist you? What do they actually do?

Starting from the most basic, a bookkeeper is defined as follows:






The most essential task a bookkeeper fulfills is reconciling your bank, credit card, line of credit and loan accounts on a monthly basis, to make sure your accounting system is complete – i.e., includes all the ins and outs, everything you’ve received, everything you’ve spent – in any given period. All so that s/he can present you with meaningful financial reports you can use to understand how your business is doing, make solid decisions and plans for the future.

But truly, a good bookkeeper’s scope can encompass so much more, variations of the below, in whatever combination best serves the person or business in question, changing over time as your needs change.

Tracking where your money goes:

  • Tracking and paying your bills, including helping you decide which bills to pay when;
  • Establishing a bill-payment schedule – like the 15th or every other week, etc. – so you’re not doing it every day or every time something lands in your inbox/mailbox, or when you remember, or when you get a reminder about a late payment;
  • Honoring your vendors and partners by paying bills on time!
  • Identifying vendors you could possibly negotiate terms/discounts with, based on volume of your purchases, length of your relationship with them;
  • Making sure you’re audit-ready, with documentation (electronic, ideally, and easy to find) for all significant purchases and payments;
  • Paying your contractors and/or employees on a transparent schedule they can rely on;
  • Responding to contractor/employee questions about their payments;
  • Sorting out whether that contractor really should be an employee (especially important in California where the rules changed a few years ago);
  • Getting you set up with actual payroll when you’re ready;
  • Building retention incentives for your employees;
  • Implementing electronic time-keeping if your employees or contractors track their hours.

Paying You, the owner/founder/CEO:

  • Identifying how best, and how much, to pay you (working through the tax implications with your tax preparer, naturally) and how (salary, draw/distribution, salary + draw?);
  • Paying you that “reasonable salary” if you’re an S-Corp;
  • Making a plan to ensure you’re getting paid regularly, without hassle or hurdles, in a way that honors your role as founder, and Lead Everything for your business.
  • Understanding clearly what the current obstacles may be to you actually getting paid, so you can make a plan to address/improve that.

Tracking Money Coming In to your Business:

  • Eliminating friction/delay/any nerves you may feel about invoicing your customers by handling invoices for you, in part or in full;
  • Following up with your customers about unpaid invoices, late invoices;
  • Solving problems arising from lost payments from your customers;
  • Cutting the time between when you send an invoice and when you get paid, by implementing payment solutions your customers will appreciate;
  • Securing written authorization from your customers allowing you to charge their card/debit their bank account for recurring payments/installment plans;
  • Automating your invoicing to the extent possible;
  • Assessing your price structure – do you need to raise your prices, by how much, and on which services?

Assessing How Well Your Business is Actually Working:

  • Generating standard financial reports for your business for your review, and for that of your shareholders/board members/partners, on a regular basis (and making sure that you can confidently read, interpret and use the data in these reports);
  • Measuring success in your business, i.e., is it working, not just for your customers, but for YOU? [Are you getting paid, how, when?]
  • Making clear the financial relationships between various parts of your business – i.e., how much of your sales income do you actually get to keep? What does it cost you to manufacture your product/deliver your service? What are your margins? If you sell more than one thing/service, which “line” is profitable or a drag?
  • Analyzing the sustainability and growth trajectory of your enterprise.

Projecting your Cash Picture in the Future:

  • Getting a clear picture of your cash flow near-term and longer-term, so you know where money goes in your business;
  • Anticipating and preparing for any projected shortfalls;
  • Planning for big expenditures in future.

Being Compliant with Rules, lots of them:

  • Responding to Workers Compensation and other insurance audits;
  • Maintaining compliance with insurance or other state or labor requirements (workers comp, Paid Sick Leave, etc.)
  • Completing your tax preparer’s annual tax organizer with/for you;
  • Paying this year’s taxes with this year’s dollars, i.e., getting off the hamster wheel;
  • Making estimated tax payments (again, working with your tax preparer, naturally);
  • Setting money aside for taxes;
  • Tracking and paying your sales tax.

Being Prepared for BSH (Bad Shit Happening):

  • Developing an Emergency Fund target, making a plan to get there;
  • Understanding how much of the money in the bank is actually yours;
  • Understanding your overall debt picture;
  • Analyzing your debt options (which credit card is costing you the most, what to pay down first, evaluating financing options);
  • Making a (gradual, achievable, success-oriented) plan for debt destruction, as needed.
  • Providing clean, professional financials so you can secure financing (Line of Credit, for example).

Tracking Investment/Assets of Your Business

  • Keeping track of inventory, helping you ensure that the total in your books is current, complete, accurate.
  • Determining whether your amount of inventory is “right” – i.e., is the amount of cash locked up in stuff appropriate to where your business is right now? Is it helping or hindering you?
  • Tracking equipment, furniture, leasehold improvements – i.e., other belongings/assets of the business that have value beyond this year.

You see? That’s a lot, and it’s not even every single possibility. Hiring a good bookkeeper can bring SO MUCH to your table, and can even help you grow your table, so to speak. As you set about looking for the right person to add their expertise to yours, consider which of our many skills you need right now so you can ask the right questions to assess whether you have a match. If I can assist, please don’t hesitate to let me know.

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