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Hello and welcome to another episode of always up to date. Today we’re going to be talking about what the duties of a bookkeeper are. Uh, so again, my name is Denise and I am a colder of always Edmonton Bookkeeping. And my name is Yahweh. I am also a co-winner. Yeah. So if you’ve seen our videos before, you know that we normally start out with a quote tennis statistic. Um, so our quote today is from, uh, red Adair who specialized in extinguishing and capping oil well fires. So the quote is, if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. And the statistic that we have is from Intuit, which is the makers of QuickBooks. Um, so only 11% of business owners seek professional help. So yeah, we, um, you have a bit of a story from our experience that, uh, you can share.

Yeah. So, uh, again, this is very common, uh, with our industry where, um, a small business owner would hire a bookkeeper who does not have an accounting background. Uh, the might just know how to use software or maybe they’ve, um, worked at a bookkeeping firm before and have some ideas on how to do the Edmonton Bookkeeping. Um, normally, um, the horror story would be, um, the chart of account would be a mess because they don’t have the accounting background, so they don’t necessarily know where the accounts should be and should be reported, um, or classified new accounts and then your transactions where will not be recorded properly. Um, and your accountant had to do to lead, do most of the bookkeeping that happened. Uh, so you ended up paying a lot of, um, expenses for your accountant, which would have been avoided if you had a, a more qualified bookkeeper.

Right? Yeah. So y’all wait, um, I just have a few questions that, um, you might want to ask about. Um, what the duties of a bookkeeper are. Uh, so first to can become a board. So, um, we’ll keep your stone have a governing body. Um, I think we talked about in a previous video, we are not very highly regulated. So what happens is that anyone who can work on a software or is very tech savvy can really become, can really, uh, become a bookkeeper just by having that knowledge in the back of their head. Um, but Edmonton Bookkeeping is for, uh, for us to help the small business owners make decisions based on the report. So, um, then this, the necessity to have more qualified bookkeeper is, um, very high. Four, very important for a small business owner. Yeah. I think we’ve talked in one of our other videos how important it is to have your bookkeeping in order and organized so that you can make those day to day decisions that you need to make. So that, you know, at the year end when you take your stuff to your account and you’re not surprised that you have no money because you made all these purchases that you really couldn’t afford. So yeah, I agree. It’s very important to have a bookkeeper that really knows what they’re doing. And I think the accountant really appreciates that too.

Um, so y’all wait, what’s accounting? A story? Accrual accounting. So accrual accounting, um, the easiest way to, um, to explain it is, um, through example for revenue and expenses. Um, if there is a difference between the time that you performed a service or encouraged at expense and the time that you received the money or you paid the money. So it’s very, uh, different, uh, from a cash basis perspective where you only record the expense or ribbon you when you received the cash. Um, so there’s a lot of error that might happen, um, as, uh, due to the fact that there is a difference between, um, the, the record date and the receipt date. Yeah. And that’s mostly what we use, right, is accrual accounting. It’s, um, that seems to be the norm to do that. Yeah. Yeah. Um, so y’all went, what, or accounts receivable and accounts payable as Edmonton Bookkeeping?

So accounts receivable and accounts payable, uh, these are very, um, helpful accounts to see what’s, what are outstanding. So accounts receivable, um, these are new revenue that you’ve already, uh, recognize or let’s say the services that you performed and uh, products that you’ve had, um, provided that you haven’t necessarily received the payment for. So your accounts receivable would really show you who owes you money. And, um, accounts payable is the other way around where you are the ones who incurred the expenses but not necessarily have paid for the services or the products. So accounts payable, uh, which show you anyone of who you owe money to. Yeah. Okay. Uh, and what is a bank reconciliation? Um, a back reconciliation. Um, we have, we’ll have another video that would kind of explain a little bit more details on this, but basically what it is is um, you’re trying to match the transactions that happened on your end versus the transactions that your, um, your back actually, uh, was able to gather with Edmonton Bookkeeping.

So back conciliation is a good practice to see what your, um, back already expected to, um, to show versus what you were expecting. So most of the time you’ll have, um, transactions that won’t necessarily show that to your back account yet, and it’s necessarily necessary to do bank reconciliation on, um, [inaudible] plea, just to make sure that you have enough cash to cover any checks that are unclear and also any fees on your back that already incurred that you don’t necessarily have, um, yeah idea or you haven’t recorded on your end yet. Right. Yeah. Good. Um, so we have a shareholder loan account. Can you just explain what a shareholder loan account matures? Yeah, so if you’re incorporated, we normally have a, um, an account called shareholder loan income. So basically what it is, is, um, any transactions that you either all even company or your company owes you top Edmonton Bookkeeping services.

So I’m normal shareholder loan account when this, uh, would normally be a credit where you, um, your company all is your money. So these are the items that you’ve, uh, normally would have paid personally, but you didn’t take any money from your corporation. So the other way around where your shareholder loan is a debit balance or a negative balance is when you actually owe money from your company because you’ve taken up too much or you’ve uh, made your company P a for personal transactions. Yeah. Good. Um, so what kind of receipts do I need to keep? Um, the, for, for series purposes? Uh, technically you have to keep all your receipts. Um, but for a record keeping purposes, normally we, we advise our client to keep anything over $100. When you receive an audit from a CRA, normally they would just look at the, um, let’s say the three or the 10 biggest transactions that you, um, that you have in a certain account.