What Does a Bookkeeper Do? Duties and Responsibilities Explained

Bookkeeping plays a vital role in your business operations, but how much do you know about the profession? 

Here, we’ll detail the main bookkeeper job responsibilities to give you insight into this profession. We’ll also examine some of the benefits of bookkeeping, and explore options for using a bookkeeper to help your business run efficiently.

What is a bookkeeper?

A bookkeeper is a professional who helps businesses and other organisations keep their finances in order. They manage general accounting ledgers, record journal entries (transactions), and generate financial statements.

Every business has unique financial circumstances, and therefore the role of a bookkeeper can vary. In addition to this, each bookkeeping professional has their own strengths and expertise. For this reason, it’s important to find a bookkeeper with the skills to match the needs of your business. 

Also read: Tips on how to become a bookkeeper

A brief history of bookkeeping

Before we dive deeper into the question at hand—what does a bookkeeper do?—let’s review a brief history of bookkeeping.

Bookkeeping and accounting are some of the oldest professions in history. In fact, you can trace bookkeeping all the way back to ancient Italy, thanks to Luca Pacioli, the “father of accounting”.

In 1494, Pacioli published “Summa de Arithmetrica, Geometrica, Proportioni et Proportionalita (Summa)”. Effectively, he introduced double-entry bookkeeping and accounting to the world. Today, many use Pacioli’s core bookkeeping and accounting principles to streamline business finances.

What does a bookkeeper do?

In the broadest sense, bookkeepers help businesses keep their finances intact by keeping tabs on different accounts, transactions, and reports. They organise, collect, and store the business’s financial records, including cash flow statements, bank reconciliations, and loss statements. Bookkeepers make it possible for business owners and accountants to build budgets, identify trends, and plan for the future. 

As a business owner, one of your primary responsibilities might be keeping tabs on your product inventory and restocking it when needed. When you order inventory, your bookkeeper would collect the receipt, enter the transaction into the general ledger, and file the record into your financial database.

Bookkeepers also help businesses keep track of their accounts receivable. Let’s say your company serviced a customer’s air conditioning system recently. Your bookkeeper may help you generate the invoice, collect a payment, enter the transaction into the general ledger, and document the paid invoice.

Bookkeeping duties will vary from business to business, depending on how it operates. Great bookkeeping is a financial tool you can use to make business management easier and reach your goals as a small business owner.

Bookkeeper duties and responsibilities

So what do bookkeepers do on a daily basis? Let’s take a look at some of the typical responsibilities of a bookkeeper:

• Complete data entry and collect transaction details: Bookkeepers gather and record all incoming and outgoing bank transactions (such as sales, purchases, payments, and receipts) into the accounting system.
• Use bookkeeping software and databases: They rely on tools like Intuit QuickBooks, spreadsheets, and other databases to post and manage financial records accurately.
• Track debits and credits: Bookkeepers monitor cash flow by recording both debits (incoming funds) and credits (outgoing expenses) for each account.
• Generate financial reports: They prepare essential financial reports such as balance sheets, income statements, and cash flow statements to help track the business’s financial health. 
• Maintain and monitor financial records: Of all the bookkeeper roles and responsibilities, this is one of the most important. Bookkeepers ensure that financial records are kept accurate, up to date, and organised—supporting business decisions and compliance.
• Reconcile discrepancies in reports: They compare the business’s financial records with bank statements and other source documents to ensure accuracy and identify any discrepancies. 
• Manage invoices and payments: Bookkeepers issue and send invoices to customers and manage accounts receivable. They also handle accounts payable, ensuring timely and accurate payment of bills and other expenses. 
• Process payroll: Bookkeepers manage employee payroll, calculating wages, deductions, and taxes, ensuring accurate and timely payments. 
• Prepare and lodge GST statements with the ATO: In Australia, bookkeepers prepare and lodge BAS to meet GST obligations, ensuring tax compliance. 

Types of bookkeeping

At this point, you could confidently answer what a bookkeeper do does, be able to list the top responsibilities and recognise the benefits of bookkeeping. 

If you’re thinking about hiring a bookkeeper or want to improve your business’ bookkeeping operations, there are a number of bookkeeping options to choose from. These include:

• DIY: As a dedicated business owner, you may want to oversee daily operations. For this reason, many business owners decide to take on bookkeeping tasks. If you have a knack for numbers and organisation, this option might work for you. However, if you decide to do your own bookkeeping, it’s important to consider the time-consuming tasks and how they might take away time from other responsibilities.
• In-house professional: If you’d rather let a professional handle your bookkeeping, consider hiring a bookkeeper in-house. Depending on your needs and your budget, you could hire someone part-time, full-time or on a contract. Hiring a bookkeeper can help you free up some of your time, but it tends to be one of the more expensive avenues for small business owners.
• Bookkeeping software: For many business owners, finding a bookkeeping solution that meets them in the middle is the best-case scenario. With Intuit QuickBooks accounting software, you can access professional and easy-to-use tools that empower you to take the lead on your bookkeeping efforts.
• Remote or virtual bookkeeper: Maybe you’d rather leave the number crunching and reporting to the experts. Hiring a remote or virtual bookkeeper may strike the perfect balance for your bookkeeping needs.

How to choose the right bookkeeper

Whether you're a sole trader or running a growing business, choosing the right bookkeeper is essential to keeping your finances on track. Here are some factors to consider before you hire:

• Registered BAS agent status: If you need help with GST or BAS lodgements, make sure your bookkeeper is a Registered BAS Agent with the Tax Practitioners Board. Check the register here.
• Industry experience: Look for someone with experience in your industry. They’ll be more familiar with common expenses, compliance requirements, and software integrations specific to your field.
• Tech-savvy with cloud accounting tools: Choose a bookkeeper who knows their way around platforms like QuickBooks. It’ll make your bookkeeping more efficient and accurate.
• Strong references or client testimonials: Ask for referrals or check reviews to get a sense of the bookkeeper’s reliability, communication style, and track record with clients.
• Work style that suits your business: Decide whether you prefer someone in-house, a virtual bookkeeper, or a bookkeeping agency. Each option has pros and cons depending on your budget, location, and level of involvement.

Benefits of bookkeepers and bookkeeping

You now know the duties of a bookkeeper and what their day-to-day responsibilities look like. But how do these job duties translate as benefits for your business? Great bookkeeping goes beyond refined record keeping and balanced books.

Here are some other benefits of hiring a bookkeeper:

• Bookkeepers free up time in your schedule for things like building your vision, polishing workflows, and boosting your bottom line.
• Hiring a professional bookkeeper minimises the room for error. With training and experience, professional bookkeepers can help ensure you’re generating accurate financial reports and data.
• In the event the ATO audits your business, having solid bookkeeping records on hand is a huge plus. Often, the auditing process is a simple review of your records. But things can become much more challenging than necessary if your bookkeeping records are out of order.

Bookkeeper vs accountant: What’s the difference?

If you were to ask someone to explain the difference between bookkeepers and accountants, they’d likely say they’re the same. People often talk about these two professions interchangeably. But there are key differences between them you’ll want to note before hiring a bookkeeper or other financial professional.

This table summarises the key differences between a bookkeeping role and the duties of an accountant:

Good bookkeepers help business owners manage their finances by documenting transactions, paying and issuing invoices, generating reports, and recording accurate financial data. Another duty of a bookkeeper is presenting the financial standing of a business. But what do all of these figures really mean, and where do you go from there? That’s where an accountant comes in.

Accountants use the records a bookkeeper provides and their own expertise to help build budgets, assess finances, make business decisions, and prepare tax returns.

Wrapping up

Bookkeepers offer support to a number of organisations, including small businesses, non-profit organisations and corporations. They play a vital role in managing a business’s finances by documenting transactions, generating reports, and assisting with accounting efforts. When looking for a contract bookkeeper to assist your business, always ask if they are a registered BAS Agent as it is a legal requirement for bookkeepers who offer BAS related services to be registered with the Tax Practitioners Board.