Understanding the Role of a Bookkeeper
Tasks of a Bookkeeping Professional:
If you’re involved in Bookkeeping for small businesses, especially in niche sectors, what responsibilities does your role entail?
I’ve been handling a Bookkeeping gig for a church where my main tasks include categorizing expenses, reconciling accounts, and preparing financial statements. I’m contemplating expanding my services to include small construction companies. However, I’m concerned that they might require more than what I’m currently capable of providing. My expertise doesn’t extend to tax advice or business management insights, as I lack experience in those areas.
I’m curious if the expectations for a bookkeeper typically go beyond the basic tasks I’m performing at the church.
Additional Context:
I currently have a full-time position with a company that manages Accounting for movies and TV shows. This role is significantly different from bookkeeping, and it’s worth mentioning that I don’t have a formal Accounting degree.
One response
As a bookkeeper, your primary responsibilities across various industries are generally similar, though the specifics can vary depending on the business’s size and sector. Here’s a detailed breakdown of typical tasks for bookkeepers, with a particular focus on those working with small businesses, including construction companies:
General Bookkeeping Tasks
Recording Transactions: This is fundamental across all Bookkeeping roles. It involves accurately logging all financial transactions, including sales, purchases, income, and payments, into the Accounting Software.
Accounts Reconciliation: Regularly reconcile bank statements with the recorded transactions to ensure accuracy and identify any discrepancies.
Expense Categorization: Assign each transaction to the appropriate expense category to facilitate accurate financial reporting and analysis.
Financial Statements: Prepare and generate periodic financial statements, such as balance sheets, income statements, and cash flow statements, to summarize the financial status of the business.
Accounts Payable and Receivable Management: Track incoming and outgoing payments, manage invoices, and ensure timely payment of bills.
Budgeting: Assist in preparing budgets by providing historical financial data and identifying spending trends.
Bookkeeping for Construction Companies
While the fundamental activities remain largely the same, bookkeeping for construction companies can involve additional complexity due to the nature of the industry:
Job Costing and Tracking: Construction bookkeeping often requires detailed tracking of expenses related to specific jobs or projects. Understanding cost codes and how to allocate costs appropriately is essential.
Progress Billing: This involves generating invoices based on the completion level of a project. It requires an understanding of how billing and revenue recognition differ in the construction industry compared to others.
Retainage Management: Construction contracts often include retainage, where a percentage of the payment is withheld until the project is completed satisfactorily. Managing retainage is crucial for maintaining cash flow.
Contract and Change Order Management: Monitor contracts and any change orders to ensure that all project costs and revenues are captured accurately.
Compliance and Reporting: Ensure compliance with industry regulations and prepare specialized reports that may be necessary for lenders or project stakeholders.
Expectations and Limitations
Tax Preparation and Advisory: Bookkeepers are not typically responsible for tax preparation or advisory unless explicitly certified or experienced in this area. It’s perfectly acceptable to leave tax-related tasks to a specialized tax professional or accountant.
Business Advisory: While some book