Bookkeeper Responsibilities – What Should NOT be Included?

Is your bookkeeper a cog in the machine or a business ally? Considering the recent rise in unemployment, some people may start fly-by-night bookkeeping businesses to replace lost income. With a simple online search anyone can find a step-by-step tutorial on “how to be a bookkeeper” without any real qualifications.

However, people that do not have the expertise and integrity needed to offer credible bookkeeping services, put the businesses employing them at risk. Furthermore, these imposters give career bookkeepers a bad name, and threaten the progress being made in a bookkeeper’s role at companies nationwide. ​

A bookkeeper has typically been a multi-hat office worker or secretary who paid bills, sent invoices, reconciled bank accounts, and cut checks for employees but as offices have modernized so has the role of an experienced bookkeeper. Bookkeeping has become a much more transformative role.

Today’s top bookkeepers are more tech savvy than ever before. They know how to use apps and new platforms to keep financial business operations running efficiently, leading to higher output and better accuracy. Modern bookkeepers are more than just data monkeys – some are asked to bridge the gap that traditionally existed between bookkeepers and accountants.

Shifting business demands, new technology, and cost reductions have changed bookkeeping expectations. Skilled bookkeepers are sometimes asked to give input for budgeting and forecasting, which has led some businessowners to assume that bookkeepers should handle anything related to the company’s finances.

So, is that an accurate assumption or is it overreaching?

Assuming your bookkeeper is not a marginal performer, which responsibilities should be included in your bookkeeper’s role and which should not?

Budgeting
Budgeting used to be more siloed in organizations, which is why some businessowners still hold the legacy view that budgeting is not part of the role of a bookkeeper. Teams used to set their own budgets and then manage spend to them on their own.

However, in some cases there is broader organizational alignment that makes skilled bookkeeper assistance an asset in this area. While bookkeepers will not create team budgets autonomously, they can report on excess budgets, identify spending trends, and analyze how current spending compares with historical spending. When your budgets must increase, a bookkeeper may shed light on how payments affect cash flow with current revenue figures and projected growth rates.
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• The Risk. The entry requirements become a bookkeeper is low. A “bookkeeper” can have high-school diploma with informal on-the-job-training vs being certified with 20 years of experience. For this reason, bookkeepers are not usually a go-to resource. 

Forecasting
Much like budgeting, forecasting is not traditionally included in a bookkeeper’s role. While an accountant or CFO is better equipped to oversee forecasting, it is becoming more commonplace for  bookkeepers to assist. A bookkeeper’s access to key financial statements and reports may be just what is needed to create business projections.
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• The Risk: A bookkeeper might be a resource for input, but their skill, experience and education must be considered before soliciting their opinion. 

Managing Strategic Shifts
When the business is fundamentally changing, an accountant or CFO is needed to preserve profitability, not a bookkeeper. There is simply too much at stake to trust a bookkeeper, who does not have relevant experience to leverage during big shifts, with your organization’s finances.
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Someone with an increased financial acumen has the vantage point needed to manage strategic changes. This applies in both high-growth and organizational downsizing scenarios because they each have distinct financial needs to consider. During times of dramatic change, many companies bring in an interim financial advisor to lend their expertise and offer the financial guidance needed to manage a strategic shift effectively.  

​Obtaining Funding
Some strategic business shifts require funding, which is an activity that should absolutely not be managed by a bookkeeper.

Diversified borrowing strategies as well as highly professional reports are needed to increase the likelihood of receiving funding. These deliverables are typically available from a fractional CFO. Additionally, an experienced CFO often has lender contacts they can leverage to get better rates and terms, making the funding they can secure more advantageous to the business. 

​Filing Taxes
Income taxes, sales tax filings, use taxes, and property taxes all require a more specialized skillset than a bookkeeper can provide to reduce the risk of being audited. While a bookkeeper can help prepare some tax forms, the accountant has a better understanding of the complexities and legal compliance. Additionally, a tax accountant or CPA can also implement the kind of strategic tax planning that helps the business improve its future tax situation as well.

Is a bookkeeper enough to handle your needs, or do you require more? If you find your needs are changing as your business evolves, you may want to consider upgrading to an accountant.

If you have any questions about the process of expanding the role or want advice about outsourcing these functions, we would be happy to help!

Contact Eric or Todd for more information.