The general process of recording and entering all the business transactions in their relevant books of accounts and making all the changes in the books of accounts that may be affected by each transaction up to the final stages of accounting by a bookkeeper is known as full cycle bookkeeping. This function is similar to accounting with the only functional different being that a bookkeeper records all the daily transactions while an accountant only works on the final financial statements and relies on the work of a bookkeeper as he uses the records entered by a bookkeeper.
Qualifications of a full cycle bookkeeper
The most and general trait that every bookkeeper should portray is integrity and uphold all the accounting standards as may be stipulated by the accounting association of the state or country in question. That is why one should be a holder of a professional certificate for him to qualify as a fully fledged accountant. Knowledge in accounting programs such as QuickBooks and sage is also very important for the job. A qualified accountant can as well work as a full cycle bookkeeper.
Functions of a full cycle bookkeeper
- Record the daily transactions of the business.
- Hand the payroll and prepare reports to the management.
- Post the already recorded transactions to the general ledger on monthly basis.
- Prepare an error free trial balance and close the accounts.
- Present the final statements to the chief accountant.
Notably, the functions of a full cycle bookkeeper are almost similar to those of an account apart from the daily transactions. A full cycle bookkeeper has more responsibilities as compared to an ordinary bookkeeper whose work is more clerical.
What are the duty limitations of a full cycle bookkeeper?
A full cycle bookkeeper cannot:
- Prepare adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process).
- Prepare final company financial statements.
- Analyze costs of operations for the business.
- File the company’s income tax returns.
- Explain or offer advice to the management on impact of financial decisions.
Why should a company hire a full cycle bookkeeper?
The cost of hiring a bookkeeper is relatively lower than that of hiring an accountant. The duties of a full cycle bookkeeper are also not very much complicated for an accountant to do them. The bookkeeper also assists the accountants in ensuring that all the financial transactions are recorded in time to avoid any inconvenience especially when there is a huge workload in the company. More details in this post: http://www.aimanitoba.ca/given-a-good-bookkeeping-system-would-financial-accounting-be-necessary/
Every business type needs a full cycle bookkeeper to assist in the accounting and finance departments with the clerical work. There is a slight different between a full cycle bookkeeper and an accountant who is mostly on the duties and responsibilities in the job description. For a business to become successful and experience growth, the accounting department should be well furnished with competent and skilled workers which include a competent full cycle bookkeeper.