what does bookkeeping involve

Many user-friendly accounting software options are available to accommodate various business needs and budgets (think QuickBooks, Xero, Wave). As you dive deeper into the bookkeeping process, it may be tempting to blur the lines between your personal and bookkeeping and payroll services business finances, but it’s not the best idea. By avoiding this, you’ll reduce the risk of triggering an IRS audit and will allow an accurate picture of your business finances. Bookkeeping is largely concerned with recordkeeping and data management.

They may have started out as a kitchen table bookkeeper and loved it, or maybe they left a big firm. Now they’ve set up business and taken on a few clients of their own through referrals from friends, colleagues and other people who’ve heard they’re bookkeeping. A forensic accountant’s job is to investigate, audit, and prove the accuracy of financial documents and dealings.

Internal management reports

Take routine bookkeeping off your never-ending to-do list with the help of a certified professional. A QuickBooks Live bookkeeper can help ensure that your business’s books close every month, and you’re primed for tax season. Our expert CPAs and QuickBooks ProAdvisors average 15 years of experience working with small businesses across various industries. Without bookkeeping, accountants would be unable to successfully provide business owners with the insight they need to make informed financial decisions.

Bookkeepers prepare financial documents for critical financial planning and filing taxes. To create these documents, a bookkeeper maintains a general ledger which is part of double-entry bookkeeping. The transaction is recorded as both credit and debit and is called a journal entry. They may use the financial data bookkeepers generate to advise business owners on tax planning and budgeting.

Consider an associate or bachelor’s degree

On top of that, they should have a sharp eye for details and a curious mind to ensure the accuracy of accounting information. Every pay period, your business must have enough cash for salaries and wages. As much as possible, you must have a separate payroll account to avoid mixing transactions.

Public accounting generally pays the most to a candidate right out of school. In particular, the big four firms of Ernst & Young, Deloitte, KPMG, and PricewaterhouseCoopers offer larger salaries than mid-size and small firms. Depending on the city, you can expect to earn between $40,000 and $60,000 your first year as a Big Four accountant. While the companies do not publish salaries on their websites, the benefits can be a large draw. For example, KPMG offers employees up to 25 days of paid vacation time, telecommuting opportunities, and a robust health insurance package. There are various career paths for accountants (and some for bookkeepers), from working as a forensic accountant to becoming a financial auditor or an enrolled agent.