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Defining the Scope of Bookkeeping Duties
As someone who’s been working as an independent Bookkeeping contractor for the past three years, I’ve noticed that my responsibilities are gradually increasing for each company I work with. I take this as a positive sign, indicating trust and confidence in my capabilities.
However, it raises an important question: where does a bookkeeper’s role conclude and that of a general manager or executive begin? For instance, let’s consider budgeting. Do you, as a bookkeeper, find yourself tasked with building and maintaining a client’s operational budget from scratch? Are you responsible for managing their entire accounts payable, from processing payments to tracking them? I recognize it’s not ideal for the same individual to handle both Bookkeeping and payments, which is why I’m looking to redefine my role.
I’m interested in gaining insight into this situation, particularly because I know there can often be grey areas. Any perspectives would be appreciated.
Note: I work in the non-profit sector in Canada, which might be relevant to this discussion.
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One response
As someone working as an independent Bookkeeping contractor, you’re likely familiar with the core responsibilities of Bookkeeping. Still, it’s essential to delineate the typical duties associated with Bookkeeping and where they might overlap or diverge from roles like a general manager or executive. Here’s a breakdown of what bookkeeping typically entails, especially within the context of non-profit organizations in Canada:
Core Bookkeeping Duties
Accurately record all financial transactions in the organization’s Accounting system. This includes sales, receipts, payments, and expenses.
Maintaining Ledgers:
Ensure all accounts are up-to-date and that entries are posted correctly to the General Ledger.
Reconciling Accounts:
Perform regular bank reconciliations to ensure that the organization’s bank and credit card statements match the recorded transactions.
Accounts Payable Management:
Track money owed by the company and prepare invoices. It’s common for bookkeepers to handle accounts payable, but best practice often involves oversight or final approval by another party to maintain checks and balances.
Accounts Receivable Management:
Monitor and collect overdue accounts to maintain positive cash flow. This can sometimes involve working with collections, depending on the policies of the organization.
Payroll Processing:
Calculate and issue payroll on a bi-weekly or monthly basis, including handling deductions and ensuring compliance with relevant tax laws.
Producing Financial Reports:
Generate standard financial reports such as the balance sheet, profit and loss statement, and cash flow statements. These reports provide a snapshot of the organization’s financial health.
Compliance with Non-Profit Regulations:
Gray Areas and Extended Duties
While the above duties are typical for bookkeepers, there are areas where responsibilities can blur, particularly in smaller organizations or if you have proven your competency and reliability:
Monitoring: Keeping track of budget variances and reporting them can fall under bookkeeping, especially since it involves dealing with numbers regularly.
Internal Controls: