Nearly 40% of small business owners admit they lack confidence in managing finances (Source: SCORE). One reason? They’re unsure what a bookkeeper really does.

So, what does a bookkeeper do, and do you actually need one? The answer depends on your business size, workload, and how often you review your finances.

In this guide, you'll learn exactly what bookkeepers handle, what tools they use, and when it's time to hire one. Let’s get started.

What Is a Bookkeeper?

A bookkeeper is a finance professional who handles the daily recording of financial transactions for a business. Their goal is to keep records clean, organized, and updated.

Key Roles:

• Track all income and expenses
  
  

• Categorize financial data
  
  

• Maintain documentation for audits or tax filing
  
  

They ensure your business ledger always reflects the real situation.

Core Responsibilities of a Bookkeeper

Bookkeepers wear many hats, depending on business size and tools in use. Here’s a breakdown of their key duties:

Record Daily Transactions

Bookkeepers log every sale, purchase, bill, or payment.

• Track sales revenue
  
  

• Log operating expenses
  
  

• Manage petty cash
  
  

Each transaction must be categorized properly for clarity.

Reconcile Bank Statements

They ensure your ledger matches the bank’s records.

• Detect missing transactions
  
  

• Identify duplicate entries or errors
  
  

• Help spot unauthorized withdrawals
  
  

Prepare and Send Invoices

Bookkeepers often handle:

• Creating customer invoices
  
  

• Tracking due dates
  
  

• Notifying about late payments
  
  

Categorize Expenses

Proper expense tracking helps with:

• Budgeting
  
  

• Tax filing
  
  

• Audit readiness
  
  

Manage Payroll Data

They help process:

• Employee wages
  
  

• Tax deductions
  
  

• Payslip records
  
  

Payroll accuracy avoids legal and financial risks.

Bookkeeper’s Responsibilities in a Snapshot

What Tools Does a Bookkeeper Use?

Bookkeepers rely on accounting software to simplify and automate tasks.

Common Bookkeeping Tools:

Automation Features Used:

• Bank feed sync
  
  

• Receipt scanning
  
  

• Auto-categorization
  
  

• Payroll integration
  
  

These tools help bookkeepers work faster with fewer errors.

What’s the Difference Between a Bookkeeper and an Accountant?

Many people confuse the two. Here’s how they differ:

Bookkeepers record financial info. Accountants analyze and advise based on that data.

Types of Bookkeepers

There’s no one-size-fits-all in bookkeeping. You’ll find various types based on your needs.

Freelance Bookkeepers: 

• Ideal for small businesses
  
  

• Cost-effective
  
  

• Flexible hours
  
  

In-House Bookkeepers:

• Employed full-time
  
  

• On-site and dedicated
  
  

• Ideal for growing teams
  
  

Virtual or Remote Bookkeepers:

• Work online using cloud tools
  
  

• Offer services globally
  
  

• Useful for startups and freelancers
  
  

Certified Bookkeepers: 

• Hold credentials from AIPB or NACPB
  
  

• More reliable for high-stake tasks
  
  

• Better for regulated businesses

When Does a Business Need a Bookkeeper?

Here are signs your business may need help:

• You miss invoice payments
  
  

• Your records are disorganized
  
  

• Tax time is stressful and confusing
  
  

• You spend hours on data entry
  
  

• Bank statements never seem to match
  
  

Hiring a bookkeeper brings clarity, accuracy, and more time for core tasks.

How Bookkeepers Prevent Financial Errors

Errors in financial data can cost money, customers, or legal trouble.

How Bookkeepers Help:

• Detect transaction duplication
  
  

• Spot missing invoices
  
  

• Ensure tax-related compliance
  
  

• Organize documents for audits
  
  

• Maintain real-time cash flow updates
  
  

This makes it easier for accountants, lenders, or investors to assess your financial health.

Bookkeeping and Tax Season

While bookkeepers don’t file taxes, they ensure your accountant has everything ready.

They provide:

• Expense reports
  
  

• Profit/loss statements
  
  

• Categorized income
  
  

• Receipts and payment records
  
  

This reduces tax filing errors and ensures smoother audits.

What Happens Without a Bookkeeper?

Here’s what can go wrong:

• Untracked expenses
  
  

• Missed tax deductions
  
  

• Poor cash flow visibility
  
  

• Delayed payments
  
  

• Penalties from filing errors
  
  

Many small business failures start with bad recordkeeping. A bookkeeper reduces that risk.

How Webisoft Clients Manage Bookkeeping

Several startups working with Webisoft use automated bookkeeping solutions that sync with banking APIs. Others hire remote certified bookkeepers to manage their cash flow, especially in blockchain or SaaS sectors.

Webisoft often integrates finance tech into client apps, making bookkeeping and reporting seamless.

Final Thoughts

Here’s the recap:

• Bookkeepers record and organize financial activity
  
  

• They reduce errors and keep records ready for tax season
  
  

• They don’t replace accountants—but they support them
  
  

Whether you’re a freelancer or scaling a business, a bookkeeper helps you stay organized, accurate, and stress-free.

If you’re drowning in receipts or unsure about cash flow, it’s time to bring a bookkeeper on board.

FAQs

Can bookkeepers handle taxes?

Bookkeepers can organize tax documents but don’t usually file taxes. That task is handled by an accountant or CPA.

Is bookkeeping software enough without a bookkeeper?

No. Tools help automate entries, but bookkeepers ensure accuracy, reconcile data, and prevent costly errors.

How often should a bookkeeper update records?

Ideally, daily or weekly. Regular updates help keep cash flow visible and prevent month-end backlogs.