7 Things Your Bookkeeper Should Be Doing (But Probably Isn't)
Your bookkeeper records transactions and reconciles accounts. Good. That's the minimum. At $5M-$50M in revenue, you need more than minimum. Here are seven things your bookkeeper should be doing that most aren't—and why the gap matters for your business.
Key Takeaways
- •Transaction entry and bank reconciliation are table stakes, not the finish line
- •Quality bookkeeping at your revenue level includes balance sheet reviews, accruals, and documentation
- •The gap between basic bookkeeping and quality accounting creates hidden problems
- •Upgrading expectations may require different skills, not just harder work
Most bookkeepers do exactly what they're asked: record transactions, categorize expenses, reconcile the bank account, and produce financial statements. If that's what you expect, that's what you get. But those baseline activities don't ensure accurate financial statements, catch emerging problems, or support business decision-making.
Here's what separates adequate bookkeeping from quality accounting—and why the difference matters more than you think.
1. Balance Sheet Review
2. Accrual Accounting
3. AR Management
4. Vendor Management
5. Month-End Close
6. Chart of Accounts
7. Exception Reporting
1. Monthly Balance Sheet Review
Most bookkeepers focus on the P&L. The balance sheet gets produced but not analyzed. Every month, someone should be asking: Does every balance sheet account make sense?
What This Looks Like
- Reviewing every balance sheet line item for reasonableness
- Explaining what each balance represents and how it changed
- Investigating balances that seem wrong or have unexpected changes
- Documenting the support for each balance (reconciliation schedules)
Why It Matters
Balance sheet errors accumulate over time. A misclassified transaction in accounts receivable might not affect the P&L much, but it distorts your understanding of collectibility. Fixed assets that no longer exist inflate your balance sheet. Accrued expenses that were never adjusted misstate liabilities.
The Test
Pick any balance sheet line item. Can your bookkeeper explain exactly what's in that balance and provide documentation? If not, that account probably hasn't been properly reviewed.
2. Proper Accrual Accounting
Many small business books are effectively cash-basis even when they claim to be accrual. Revenue is recorded when invoiced (not when earned), expenses when paid (not when incurred), and prepaids sit unchanged for months.
What This Looks Like
- Recording revenue when earned, regardless of invoicing
- Accruing expenses for services received but not yet billed
- Amortizing prepaid expenses monthly (insurance, software, etc.)
- Deferring revenue received but not yet earned
- Monthly review and update of all accrual accounts
Why It Matters
Accrual accounting exists because it matches revenue with the expenses that generated it. Without proper accruals, your monthly P&L is distorted. Months with large insurance payments look terrible; other months look artificially good. You can't compare periods meaningfully.
Common Accrual Gaps
Annual insurance: Should be expensed 1/12 per month, not all when paid
Prepaid software: Annual subscriptions amortized monthly
Unbilled services: Work completed but not yet invoiced
Accrued expenses: Services received but invoice not yet processed
3. Accounts Receivable Management
Bookkeepers typically record receivables and produce aging reports. Quality accounting goes further: actively managing collections, identifying problem accounts, and maintaining accurate bad debt reserves.
What This Looks Like
- Weekly aging review with follow-up on past-due accounts
- Clear escalation process for seriously delinquent accounts
- Regular communication with sales about customer payment issues
- Quarterly review and adjustment of bad debt reserve
- Documentation of collection efforts for write-off support
Why It Matters
Receivables that age past 90 days rarely get collected in full. The longer you wait to address collection issues, the less you'll recover. Active AR management improves cash flow and reduces bad debt expense. It also provides early warning about customer financial distress.
4. Vendor and Contract Management
Bookkeepers process invoices. Quality accounting includes ensuring you're getting what you're paying for, identifying savings opportunities, and managing vendor relationships proactively.
What This Looks Like
- Maintaining a contract database with key terms and renewal dates
- Flagging auto-renewals before they occur
- Periodic vendor spend analysis to identify consolidation opportunities
- Verifying invoices against contracts for correct pricing
- Tracking vendor credits and ensuring they're applied
Why It Matters
Vendor costs creep up when no one's watching. Price increases slip through. Unused subscriptions continue billing. Contracts auto-renew at higher rates. Active vendor management typically identifies 3-5% savings annually—which flows directly to profit.
Contract Calendar
A simple spreadsheet tracking all contracts with renewal dates, cancellation windows, and price terms prevents auto-renewal surprises and creates negotiation opportunities.
5. Month-End Close Discipline
"Close" doesn't mean "generate financial statements." It means systematically completing all month-end procedures to ensure statements are complete and accurate before they're produced.
What This Looks Like
- Documented close checklist completed each month
- All bank and credit card accounts reconciled
- Intercompany transactions reconciled (if applicable)
- All recurring entries posted (depreciation, amortization, etc.)
- Cut-off procedures for revenue and expenses
- Close completed within defined timeline (e.g., 10 business days)
Why It Matters
Without close discipline, financial statements are produced before the books are actually closed. Transactions get entered after statements are run, making reports obsolete immediately. Month-over-month comparisons become unreliable.
Standard Close Timeline
Day 1-3: All transactions entered and reconciled
Day 4-5: Accruals and adjusting entries
Day 6-7: Review and corrections
Day 8-10: Final statements and analysis
Many $10M+ businesses should close within 10 business days.
6. Chart of Accounts Maintenance
Charts of accounts evolve organically—new accounts added whenever someone needs one, old accounts never removed. Over time, the chart becomes a mess that makes analysis impossible.
What This Looks Like
- Documented chart of accounts with clear purpose for each account
- Consistent account structure across similar items
- Regular cleanup of unused or duplicate accounts
- Clear coding guidelines for ambiguous transactions
- Periodic review of categorization consistency
Why It Matters
Your chart of accounts determines what you can see. If marketing expenses are scattered across ten accounts with inconsistent naming, you can't easily see marketing spend. If "Miscellaneous" accounts grow, you lose visibility into what you're spending.
The Miscellaneous Test
How large is your "Miscellaneous Expense" account? If it's more than 1-2% of total expenses, you have a categorization problem. Someone is using it as a catch-all rather than coding properly.
7. Exception Identification and Communication
Bookkeepers often see problems first—unusual transactions, vendors billing more than expected, revenue running behind budget. Quality accounting includes surfacing these observations proactively.
What This Looks Like
- Flagging transactions that seem unusual or require investigation
- Alerting management when cash is running low
- Noting when expenses in a category spike unexpectedly
- Communicating when receivables aging is deteriorating
- Proactive questions about items that don't look right
Why It Matters
Your bookkeeper processes more financial information than anyone else in the company. They see patterns and anomalies that others miss. But many bookkeepers don't see exception identification as their job—they record what comes in without questioning it.
Exception Examples
"This vendor's invoice is 20% higher than usual—should I verify?"
"Cash will fall below $X if all pending checks clear—wanted you to know"
"This customer has paid late three months in a row—developing pattern"
"This expense doesn't match our coding guidelines—where should it go?"
Upgrading Your Bookkeeping
Set Expectations
If you've never explicitly asked for these things, your bookkeeper may not know you want them. Start by sharing expectations and asking what support they need to deliver at this level.
Assess Capability
Some of these tasks require different skills than basic transaction entry. Your bookkeeper may not have the training or experience. This isn't failure—it's recognizing that you may have outgrown their capabilities.
Consider a Controller Layer
Many businesses add controller oversight above the bookkeeper—someone who reviews the bookkeeper's work, ensures month-end quality, and provides the analysis layer. This doesn't require a full-time hire; fractional support often works well.
The Right Structure
Transaction processing (bookkeeper) + Review and oversight (controller) = Quality financial statements. Most $10M+ businesses need both layers, even if one is part-time.
Need Better Financial Management?
Eagle Rock CFO provides accounting services that go beyond basic bookkeeping. We ensure your books are not just balanced, but accurate, analyzed, and actionable—with the controller layer that growing businesses need.
Upgrade Your Accounting