As the old saying goes, if I had a nickel for every time a client or prospect told me they didn’t need a CFO or accountant for their business because they have a “good” bookkeeper, I’d certainly be rich!
The fact is bookkeeping is not accounting. Entrepreneurs hire bookkeepers all the time to handle their books and things seem to work out fine. The issue is that you and your bookkeeper don’t know what you don’t know. Unintentionally, your bookkeeper could be hurting your business. In reality, most bookkeepers cannot give small businesses the financial assistance they truly need.
With proper oversight, most bookkeepers can safely perform these tasks:
-Record basic business transactions
-Reconcile accounts
-Perform financial, clerical functions such as paying bills, invoicing customers and preparing payroll
However, do not expect your bookkeeper to:
-Set up your accounting systems
–Interpret your financial results
-Give business advice
-Set up business systems that provide critical management information
-Set up internal controls to protect your assets
-Prepare accurate financial reports that follow generally accepted accounting principles
-Develop and manage your budget
Many of the bookkeepers we have encountered are hard-working. However, most have little in the way of formal finance or accounting education and training. Without a formal course of study and no oversight by a qualified CFO or accountant, many bookkeepers learned incorrectly how to do some aspects of bookkeeping, or never learned others at all.
While, it’s important to be aware of the risk, don’t let this scare you. Bookkeepers can and do play an important role. But, as important is for you to know their limitations. Even more importantly, their work should be overseen by a qualified CFO or accountant. That oversight will insure your back office is set up correctly and functions smoothly.
If you have a business with just a bookkeeper who is handling all of your businesses finances, or are performing that role yourself as the business owner, contact Barba CFO by clicking here. We can help you gain control of your businesses finances and let you focus on growing your business.
