Ep 15 – Your Role as a Bookkeeper


Episode 015 – Your Role as a Bookkeeper


Recorded: February 14, 2022

Released: February 14, 2022

Intro by Clive Castle

Sounds by ZapSplat


Understanding your role as a bookkeeping professional enables you to provide more value to your employer or client.




Hello and welcome to another episode of The Better Bookkeeper Podcast. I am your host, Patrick Donovan, President of Cape May Counting House. Thank you for joining me today. If you like what you hear, please consider subscribing so that you can be notified when a new episode is uploaded. If you would like to see the transcript to today’s episode please visit thebetterbookkeeper.com/015.

It has been a while since I added an episode because a unique opportunity presented itself that I could not pass up. I accepted a position with a local company where I was able to build some more experience working with the inventory side of a business. After about six months I was promoted to a co-manager of the department. I wrote several procedures to assist in training, documented some workflows, implemented a priority schedule and also created a departmental mission statement to help guide peoples’ decisions.

It was a great company to work for and they treated their employees very well but it got to the point where I had to make a decision. I decided that if I was going to put forth that level of effort, for me, I should be doing that to grow this podcast, my bookkeeping firm, and the nonprofit, Cape May Donates, that my partner, his brother, and myself operate.

With that being said, you cannot underestimate the value of experience. And that leads me to the topic of this episode, Understanding Your Role as a bookkeeping professional so let’s get into it. I’ll see you on the other side.


Welcome back! Being a bookkeeper is an essential role. Unfortunately, I feel that many businesses fail to appreciate the value that a bookkeeper or accounting professional brings to the table. Some businesses consider this role as just another cog in the wheel but there’s more to it than that.

The decisions that management makes is entirely dependent upon the accuracy of their financial records. A bookkeeper must have an intimate knowledge of the inner workings of the operation so that they can be sure that transactions are being categorized properly and that revenue is recognized at the appropriate time. There is a laundry list of items that must be accurately recorded or the integrity of the financial statements will be called into question.

The timeliness of updating the financial records is also something that is essential to the role of a bookkeeper. If it takes weeks for transactions to get entered into the accounting system then what use is it for management to pull reports because they won’t be complete. You certainly shouldn’t make business decisions when you don’t have all of the data.

Making yourself and the services you provide more valuable to your employer or,  if you run your own bookkeeping firm, to your clients is key to your longevity. You add value by being knowledgeable about the industry in which you are working for, understanding the nuances, and being able to benchmark performance against others in the industry. Providing insight into how your employer or your client is performing compared to others can be a boon to your reputation. This will help set you apart from your competition!

Having access to sensitive financial data comes with responsibility. The confidential information with which you are working should not be divulged to anyone outside of the company, unless you work for a publicly-traded company. However, even then you have to be careful that you are not providing information that could give away a company’s competitive advantage. Even within a company, only certain individuals should have access to financial reports to minimize that information getting into the wrong hands.

One thing that I believe bookkeepers should be providing more of is a basic analysis of the financial statements. After ensuring that all information has been entered into the accounting system, produce a basic financial statement analysis report for management. Analyze the income statement by providing ratios on gross profit, operating profit, and net profit margins.  Providing a vertical analysis of the breakdown of each item compared to net sales and then seeing how that compares to the previous period or year-over-year makes the financial statements come to life. Highlight some outliers such as significantly higher labor costs, or drastic increase in cost of goods sold, for example. By being knowledgeable about the industry you can narrow down specific metrics that would prove useful to management.

Analyze the balance sheet and provide the current ratio and if the company carries inventory, provide the quick ratio as a comparison. Provide the debt-to-equity ratio, show the amount of working capital and the total assets-to-total liabilities ratio.

And don’t forget the statement of cash flows. This statement can be a little confusing but by providing some insight from your analysis can bring clarity. Did the business not generate a positive cash flow from operations? That’s important to know! Was there a significant increase in fixed assets or equipment? What about financing that was brought into the business? Was it appropriately recorded and how does this impact management’s decisions going forward?

Doing these things can draw attention to some key items that may not be apparent if you’re just looking at numbers on a page. Financial statements tell a story and what better person to tell it than you, the bookkeeping professional!

So, in summary, be knowledgeable about the business and industry in which your employer or client operates. Stay current on changes within the accounting and bookkeeping realm so that you are categorizing transactions properly by subscribing to and actually reading accounting industry publications. And provide an analysis of the financial statements to help guide management’s business decisions.