Accounting Guide
What Is Bookkeeping?
What Does a Bookkeeper Actually Do?
A bookkeeper's core job is to keep an accurate, current record of all your business's financial activity. On a monthly basis, that typically means:
- ✓ Coding and posting every transaction (income, expense, transfer)
- ✓ Reconciling all bank and credit card accounts against statements
- ✓ Producing a Profit & Loss statement and Balance Sheet
- ✓ Filing sales tax returns (if applicable)
- ✓ Managing accounts payable and receivable (in full-service arrangements)
Done correctly, monthly bookkeeping means you always know your real profit, your cash position, and what you owe. Done incorrectly — or not done at all — means tax time surprises, missed deductions, and business decisions made without accurate information.
Bookkeeping vs. Accounting — What's the Difference?
The terms are often used interchangeably, but they describe different functions:
Bookkeeping
- Records transactions daily and monthly
- Reconciles bank accounts
- Maintains ledgers and chart of accounts
- Produces financial statements
- Files sales tax returns
Accounting
- Analyzes financial data
- Prepares income tax returns
- Handles IRS compliance and audits
- Provides financial strategy advice
- Performs forensic and historical accounting
At ASU, one team handles both. Your bookkeeper keeps your records current; your accountant uses those records to handle taxes and strategy. Learn about ASU's bookkeeping service →
Why Bookkeeping Matters for Your Business
Accurate bookkeeping is not just a tax requirement — it's what allows you to make good business decisions. Without clean books, you can't answer the most basic questions: Am I profitable? What's my cash flow this month? Can I afford to hire someone?
Clean monthly books also mean lower tax preparation costs (your accountant doesn't have to reconstruct a year of transactions), reduced audit risk, and the ability to qualify for a bank loan when you need one. Most small business owners find the cost of outsourced bookkeeping pays for itself in tax savings and avoided errors in the first year.
Signs You Need to Outsource Your Bookkeeping
- ✓ You spend more than a few hours per month on your books
- ✓ Your records are more than 30 days behind
- ✓ You have made errors on past tax returns
- ✓ You cannot quickly answer "what is my gross profit this month?"
- ✓ Your transaction volume is growing faster than your time allows
- ✓ Tax season feels chaotic because your records are not organized
Bookkeeping — Frequently Asked Questions
What is bookkeeping in simple terms?
Bookkeeping is the process of recording every financial transaction your business makes — every sale, expense, payment, and deposit — in an organized system. The goal is to keep an accurate, up-to-date record of where your money comes from and where it goes, so you can produce financial statements and file accurate tax returns.
What is the difference between bookkeeping and accounting?
Bookkeeping is the day-to-day data entry and record-keeping: coding transactions, reconciling bank accounts, and maintaining ledgers. Accounting analyzes that data to produce financial reports, tax returns, and strategic financial advice. You need both. A bookkeeper keeps your records current; an accountant interprets those records and handles compliance and strategy.
What does a bookkeeper do every month?
A monthly bookkeeper codes and posts all transactions (income and expenses), reconciles all bank and credit card accounts, prepares a Profit & Loss statement and Balance Sheet, and files any required sales tax returns. Some bookkeepers also handle payroll, accounts payable, and accounts receivable.
When should a small business owner outsource bookkeeping?
You should outsource bookkeeping when: (1) you spend more than a few hours per month on your books, (2) your records are more than a month behind, (3) you have made errors on tax returns, (4) you cannot quickly answer basic questions like "what is my gross profit margin this month," or (5) your business is growing and the volume of transactions is increasing.
How much does outsourced bookkeeping cost?
Outsourced bookkeeping typically costs $200–$800/month for small businesses, depending on transaction volume and services included. ASU provides custom flat-rate quotes based on your specific situation. Call (504) 838-7140 for a free consultation and quote. There is no contract required.