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What is bookkeeping?

Bookkeeping is a standard business practice involving the systematic recording of financial transactions, including income and expenses, to maintain accurate financial records. It is an essential function for most businesses that helps inform decision making, meet tax obligations, secure financing, and track a business’s financial health.

Bookkeeping encompasses various tasks such as maintaining ledgers, tracking income and expenses, reconciling accounts, and ensuring that all financial records comply with relevant tax and regulatory requirements.

What does a bookkeeper do?

A bookkeeper is the financial guardian of a business, meticulously recording, organising, and managing its financial transactions. They ensure that all financial records are accurate and up-to-date, offering insights into a company’s financial health and helping it make informed decisions. In short, a bookkeeper is the backbone of financial stability, providing businesses with the clarity and compliance they need to thrive.

Their typical responsibilities include:

Record Keeping

Bookkeepers record every financial transaction, such as sales, purchases, payroll, and expenses, into an accounting system. They ensure that all transactions are accurately recorded.

Bank Reconciliation

Bookkeepers reconcile bank statements with the company’s financial records to identify any discrepancies, ensuring that the company’s cash flow is accurate.

Accounts Receivable and Payable

They manage accounts receivable by tracking customer payments and accounts payable by overseeing vendor bills and payments.

Payroll Processing

Many bookkeepers handle payroll, including calculating employee wages, preparing pay runs, and ensuring compliance with tax laws.

Financial Reporting

They generate financial reports, such as income statements, balance sheets, and cash flow statements, to help business owners make informed decisions.

Tax Compliance

Bookkeepers ensure that all financial records are in order, helping businesses meet their tax obligations and avoid penalties.
At Retinue we offer bookkeeping as part of our standard service, which is included alongside a 24/7 accounting team and monthly reporting.

What’s the difference between a bookkeeper and an accountant?

While bookkeepers and accountants share similar financial responsibilities, the main differences between accountants and bookkeepers involve the scope of financial services they offer and their qualifications.

Qualifications

Bookkeepers typically hold a Certificate IV in Bookkeeping or a similar qualification, while accountants require a bachelor’s degree and professional certification, such as being a Certified Practising Accountant (CPA) or a Chartered Accountant (CA).

Scope of Work

Bookkeepers focus on day-to-day financial tasks, including data entry, reconciliation, and reporting. Accountants provide broader financial services, including tax planning, financial analysis, and audit support.

Regulations

In Australia, bookkeepers are not authorised to provide tax or financial advice, while accountants are subject to stricter regulatory oversight and can offer a wider range of financial services.

Reporting

Accountants typically review and analyse the financial data provided by bookkeepers to offer strategic financial advice and make high-level financial decisions.
At Retinue we offer a team of qualified bookkeepers and accountants so you have all the financial expertise you need at your fingertips, and in a single service.

24/7 Tax, Bookkeeping and Payroll* support. Guaranteed.

We envisage a future where every small business can get the right advice, at the right time, at the right price.

How much do bookkeepers charge?

The hourly rate of a bookkeeper can vary widely. While there is no one-size-fits-all formula, the following elements are typically considered in bookkeeper fees:

Experience and Qualifications

A bookkeeper’s level of experience and qualifications significantly influence their hourly rate. Those with more years in the field or advanced certifications may charge higher rates.

Scope of Services​

The complexity of the bookkeeping tasks you require can affect the rate. Some bookkeepers may offer more specialised services or may charge more for their expertise.

Industry Knowledge

If a bookkeeper has experience in a particular industry, they may charge more for their specialised knowledge and understanding of industry-specific financial processes.

Software Proficiency

Proficiency in accounting and bookkeeping software can also influence the rate. A bookkeeper who is well-versed in a variety of software platforms may command a higher rate.

Overhead Costs​

A bookkeeper’s overhead costs, including office space, utilities, and software subscriptions, may be factored into their hourly rate.

Demand and Availability

The demand for a bookkeeper’s services and their availability can also impact their rate. A highly sought-after bookkeeper may charge more.
As a small business owner it can be difficult to select the most cost-effective bookkeeping service for your business. But at Retinue, we don’t believe in an hourly-based billing model. You should have certainty and transparency around the cost of important services such as bookkeeping and accounting. That’s why we offer a fixed fee subscription model with no hidden fees or extra costs.

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FAQ

Bookkeeping is the process of recording and organising financial transactions for a business. It is essential for several reasons:

• It helps you track your business’s financial health and performance.
• Accurate bookkeeping is necessary for compliance with tax regulations.
• It provides a clear picture of your cash flow, making it easier to manage finances.
• It facilitates informed decision-making and helps secure financing or investment.

Whether you need professional help or can manage bookkeeping on your own depends on your experience and the complexity of your business. Small businesses with straightforward finances may be able to handle bookkeeping themselves, while larger or more complex businesses may benefit from professional bookkeepers or accountants to ensure accuracy and compliance. Generally, given the specialised nature of finance and Australia’s high regulatory environment, it may be suitable for small businesses to explore outsourcing their bookkeeping to a professional to ensure accuracy and peace of mind.

To maintain proper bookkeeping records, you should keep:

• Sales and purchase invoices/receipts
• Bank and credit card statements
• Petty cash records
• Payroll records
• Tax documents and returns
• General ledger (which summarises all financial transactions)

Outsourcing your bookkeeping can offer several benefits, including:

Expertise

Outsourced bookkeepers are often highly trained and experienced, ensuring that your financial records are in capable hands.

Cost Savings

Outsourcing can be more cost-effective than hiring an in-house bookkeeper as it eliminates the need for employee benefits, office space, and equipment.

Flexibility

You can scale bookkeeping services up or down as needed, adapting to your business’s changing requirements.

Reduced Errors

Outsourcing minimises the risk of internal errors and ensures accuracy in financial records.

Focus on the business

With bookkeeping off your plate, you can concentrate on your business’s core functions and strategic growth.

When choosing a bookkeeper for your small business, consider the following factors:

Qualifications

Look for a bookkeeper with relevant qualifications and certifications, such as Certificate IV in Bookkeeping.

Experience

Prior experience in your industry can be a significant advantage.

Software Proficiency

Ensure the bookkeeper is proficient in the bookkeeping software that will best support your business.

Communication

Effective communication and responsiveness are crucial for a successful partnership

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