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What Does a Bookkeeper Really Do?

All it takes to realise the value of a bookkeeper is to imagine a world without one!

A bookkeeper tracks and records all the financial transactions your business makes on a day-to-day basis. This practice, in its very basic forms, dates all the way back 7500 BC. According to historians, Mesopotamians would use small clay pieces to keep record of goods. One clay piece could represent a commodity like cloth, food or acts of labour.

Gradually over time, these clay pieces were inscribed with markings to denote what commodity each one represented. These markings were then inscribed onto parchment – much like modern day accounting – and the clay pieces were abandoned altogether. In ancient Mesopotamia, writing and accounting are said to have evolved together.

As time went on, the ability to accrue personal wealth – due to the influx of monetary objects and goods – necessitated more complex systems of bookkeeping.

Fast forward about 2500 years to Egypt, where Egyptian royals are said to have hired bookkeepers to keep detailed accounts of their assets and liabilities – what they owned, owed and what others owed them! Labels made of bone would be attached to goods to keep track of the finer details of transactions. This was the perfect opportunity for ruling entities to capitulate on the recording of financial information for more detailed and accurate tax records.

One of the major changes that lead to modern bookkeeping occurred in Italy when, in the 15th century, a man called Luca Pacioli published his major work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita. In this work, Pacioli detailed what we now recognise as the system of double-entry bookkeeping.

Double-entry Bookkeeping is the act of recording financial transactions twice through a combination of debits and credits. Pacioli’s method is still used today!


Let’s imagine for a moment that Pacioli’s method never materialised and we were never introduced to the more complex methods of bookkeeping.

Here are five ways that your business would seriously suffer without a bookkeeper!

Lose track of where your money goes.

If you were unable to keep track of your financial transactions using a bookkeeper, you would no longer have a comprehensive understanding of how you, or your company, earns and spends money. This wouldn’t just make it harder for your business today, it would also throw the future of your business into confusion!

Without bookkeeping, monitoring your cash flow becomes obscured. This would make it nearly impossible to understand how your business can grow – there would be no record of assets or liabilities, commodities that your company owns or loans that must be repaid. Analysing this data through financial statements would not be a viable option. As a result, you would have no idea whether your business was a success or a failure!

No more financial support!

Having detailed and up-to-date books doesn’t just help your business keep track of cash flow, it also helps potential lenders understanding why your business may need an influx of cash. If you went to a bank and asked for a loan without any kind of financial records, the bank would almost certainly refuse. Why would a bank lend to a business that has no idea what it does and doesn’t have?

Unsure if somebody owes you money.

If you don’t keep track of your cash flow, you may have no idea whether a customer owes you money. Without a bookkeeper, there would be no detailed records of invoices, receipts or revenue. As a result, you could supply a customer with a service or good and not know whether you have received payment.

If these started to add up, you could find a serious hole in your company finances.

No More Tax Deductions without a bookkeeper!

For a business with accurate records, you can keep track of where you may qualify for tax deductions. Over time, this could save you a hefty amount of money! You could receive a tax deduction for any number of things, from professional fees for accountants to advertising and marketing costs. Expenses like these are tracked by bookkeepers in the general ledger. If the double-entry method didn’t exist, your business would have no way of knowing where you would qualify for tax deductions.

Like unpaid invoices, bookkeeping helps you keep track of little things that could make a big financial difference.

Making business decisions becomes a blind gamble!

You might have guessed this from the last few, but bookkeeping provides a comprehensive record of pretty much everything financial. For a small business, this kind of record is crucial. Borrowing money, requesting unpaid invoices, making investments, claiming expenses… the list could go on.

If you had no financial records, any business decision you make would be uninformed and involve taking uncalculated risks. Without detailed books, you lose your ability to analyse and understand your business’ performance. Achieving a healthy growth becomes so much more difficult without the ability to assess your business needs.

Your Business needs a Bookkeeper

Long-story short, bookkeepers are an integral part of the healthy success and growth of a small-business. Keeping track of your financial records can help you do a whole host of things that benefit your business. Whether you do this yourself, or hire an external service like ours, bookkeeping can really help you keep on top of where your business is and where it can be.

Think back to Mesopotamia and how those clay pieces have shaped the way we conduct business. Something as inherently simple as a record of financial information can help evolve your business that little bit further.

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