Bookkeeping to me is a lot more transactional. It’s like recording the accounts payable or making a bill to your customer, those types of things. And the more functional day-to-day pieces – taxes and the payroll, and all those types of items. All those things are usually handled at my client’s level. The side piece is payroll, which is something that we do internally, and some people like to do it themselves, and that’s fine. The client really takes care of the day-to-day bookkeeping as far as the transactional pieces, (because) they’re on the ground all the time and they understand like if they make a side deal or all the payments coming or this and that, they understand that and they know all those things are happening. My firm kind of picks it up from that point in time.
Working Your Bookkeeping Skills with Balance Sheets
What does a bookkeeper do? One of them is balance sheet. Balance sheet is what I like to look at or think of as a picture in time. How much cash you had in the bank, how many receivables you had, what type of inventory you had, who you owed on that date. The income statement is more of a…it’s almost like a pipeline and looking all the way through and it changes every day and it’s pushing all the way through. And so, we’ll look from the beginning of the year and through today and say, “Okay, this is how much money you’ve had in sales. This is how much money you’ve had spent.” That profit number goes into the equity section of a balance sheet. And that’s a very confusing piece for a lot of people is what is equity.
What is the Importance of Good Bookkeeping?
What is bookkeeping for a Fort Collins CPA? A good bookkeeper is detail-oriented, and they will agonize and analyze how to get transactions in, and they’ll be able to move a lot of transactions in and out and put them properly in the right categories and whatever else and keep track of all that stuff. Some bookkeepers that I have seen are not consistent or are able to look at things and say, “Oh well we’ve got a problem here and we already paid this bill twice…” and all those types of things. So, what does a bookkeeper do? A good bookkeeper is somebody who is really detail driven and is able to see something, recognize it and know what to do with it. Then an accountant will be able to take that information and look at it and really be able to understand what’s going on, be able to analyze things and take the numbers and maybe twist them a little bit and say, “Okay, well if we did this, this is the effect of it.” Some people are more wired to do the bookkeeping better, other people are not. And even if you are wired to do it, sometimes it’s not the best use of your time.
And there are no restrictions against it. So that’s why you see a lot of people that just say, “Well I kind of like this…” and they open their own bookkeeping place – QuickBooks or whatever and stuff. But truthfully, I hear this so often where a person says, “Well, QuickBooks does this for me.” That’s kind of scary in my world to be honest with you because that requires a lot of analysis and looking at things and stuff gets put in the wrong. It’s like taking your socks and putting them in the drawer that has all your cleaning supplies. They just don’t go there at all times.
What is the Importance of Good Bookkeeping?
An immediate pain point that is in their face that they’re saying, “I need to get this resolved and taken care of.” And so I have seen many clients like that. There’s pain or fear of the present and there’s pain and fear of the future. And pain and fear of the present are probably fairly big drivers of what’s going on and why they say: “Seek additional professional help” a lot. They’ve heard about it and they go, “Well, maybe it’s time for me to do it and I’ve gotta take this dive and make this.
