What Does an Accounts Payable Clerk Do?

Payroll is one of the most important components of running a business. It can also be one of the biggest expenses. So what is payroll exactly? In a nutshell, the term refers to the total amount of wages that a company pays its employees. But running payroll involves complex calculations of the employees’ earnings and tax deductions. If this sounds complicated, that’s because it is. Luckily, we’re here to help you make sense of it all so that you can decide whether you want to take on these tasks yourself or leave them to the professionals.Payroll ExplainedUnderstanding payroll is essential to understanding the financial details of your business and remaining compliant with state and federal laws. In addition to calculating how much your employees need to be paid, payroll also refers to:    Calculating tax deductions Annual records of employee wages or the total payroll that includes the overall workforce costsHow does payroll work?Small business payroll processing starts the moment a company hires a new employee and ends with the conclusion of the employment period. During that time, the US payroll law obliges employers to ensure that employee payrolls don’t have any errors and are completed on time. For many business owners, doing payroll on their own is stressful and time-consuming, especially because they need to focus on other tasks. Using free payroll software products can simplify a company's payroll processing. However, these provide businesses with only the basic payroll features. Companies that have their own payroll sector sometimes use a combination of payroll and accounting software products to ensure accuracy when calculating tax deductions and conducting payroll preparation.What is the payroll process?Regardless of whether you’re planning to do your own payroll processing or hire someone else to do it for you, there are a few basics that you need to be familiar with. Collect information from your employeesBefore initiating payroll procedures, you need to decide how to pay employees for their work. There are two options. You can either pay annual salaries or hourly wages. Regardless of which option you choose, the total amount is referred to as gross pay, which is what an employee makes pre-tax and before subtracting deductions. Each employee needs to complete Form W-4, which includes their personal details and information about their federal income tax withholding. If employees change their marital status or have kids, the appropriate changes need to be made to the payroll, meaning that you should review the withholdings of each employee every year. Establish payment method and paydaysAnother important thing to decide is how you make payments. You may use paper checks or direct deposits, but it’s crucial to establish a regular schedule. It can be weekly or monthly, depending on each employee’s payroll status. Calculate employee time and overtimeIf you have per hour workers, you need to calculate the number of hours they worked. Most businesses use time tracking software for measuring working hours and employee productivity.When it comes to salary workers, you can ask them to use time tracking tools to calculate overtime and track their productivity. Calculate payroll deductionsThe next part in our payroll description relates to various deductions you need to make from your employees’ paychecks. Deductions are made in order to cover Social Security and Medicare taxes, which are also referred to as FICA taxes. FICA is short for the Federal Insurance Contributions Act, a payroll contribution for both employers and employees. These are the most common taxes deducted from the gross salary, but employees can ask for reimbursement of these deductions. FICA taxes and federal, state, and local taxes are also called payroll taxes. Additional deductions are made for income and unemployment taxes. Finally, there are the less common wage garnishment deductions that can cover anything from credit to bankruptcy payments.Calculate payrollWhen you are familiar with the payroll basics, you’re equipped to calculate your employees’ net salary. This is probably the most complicated part of the business because you need to know how to use the payroll formula and organize deductions. The first thing you need to do is to calculate gross salary and then start with the deductions. It’s easier to do payroll with software, but some business owners do it manually. Since you need to submit reports to the IRS, you need basic knowledge about tax laws. This is why many business owners leave payroll to professional accountants and managers. In order to define payroll, we also need to mention net pay. This is the employee’s gross pay after deductions. It shows on the employee’s pay stub, which can also include their gross pay, benefits, overtime, and reimbursements.Bottom line

If you run a small business and you want to get compensated for the goods and services you provide, you can’t afford not to invoice your clients. Drawing up invoices may not be the most exciting thing on your to-do list, but it's an essential part of running a successful company.  So how do invoices work? It’s important to note that invoicing doesn’t have to be a tedious task. Our guide will walk you through the entire process. What is an invoice? Before we delve deeper into the invoicing process, we have to explain what invoices are. In short, companies issue an invoice to bill customers for the goods or services that they’ve purchased. It’s a payment demand that includes the total amount due, the description of all the services or goods, due date, and payment terms. Of course, you’ll also have to include things like your name, address, and contact details. What is an invoice used for? While it’s true that you can turn to free online software to help you with your invoicing, it still helps to know how invoices are used. This time-stamped document informs your clients that they owe you a certain amount of money for services rendered. And although invoicing might seem complicated, there are a number of reasons why you should use invoices over purchase orders and a sales receipt. Generating settlements: Having all the details of the service and goods listed represents legal proof that can be used to protect the merchant from lawsuits and false allegations.  Payment tracking: With an invoice, you’ll be able to track and record all your sales and store them in your financial history.  Easy tax filing: With all your invoices recorded, reporting your company’s income is a breeze. Business analytics: Your invoices are a useful source of information on the buying habits of your customers and popular products, which can be helpful with your marketing strategy. How to make an invoice? Creating invoices and conducting payments is a no-frills job, as there are numerous brick and mortar and online bookkeeping services to help small businesses out. If you don’t have anyone to lean on, then make your own invoice - it’s a breeze. There aren’t any standardized forms that you have to use when making an invoice, which can be advantageous and confusing at the same time. If you’re trying to figure out how to write an invoice, the first thing you should do is map out the format.  The earliest records of transactions date back to 5000 BC, when invoices were carved on stone tablets or clay. But we’ve come a long way since then, and today’s invoices are typed out on paper and delivered by electronic or traditional mail.  As such, invoicing procedures have never been more accessible and eco-friendly with paperless invoices sent through email and paid online. Regardless of which method you use, make sure to include the following components in your invoice: The word “Invoice” and the company’s logo at the top An invoice number Your personal details (name, address, phone number) The client’s personal details The date of service rendered Description of products/services  Amount due  Payment due date  Payment terms (late fees, discounts) You can simplify the invoicing process by either using an online platform or choosing an invoice template. Simply choose a free template that’s most suitable for your business and create an invoice. How do invoices work? Now that you know what an invoice is and how to create one, you’re all set for the next part. Here are the steps you should follow: Agree on the purchase with your customer. Set the price, potential discounts, additional taxes, and discuss them in detail. Agree on all the terms, elements of the invoice, and get the personal details of all the parties involved.  Set the due date. Keep in mind that you can discuss the due date and offer discounts for early payments. Also, you may allow big players to pay at a later date; in this case, you would issue credit terms without charging the interest. Having an invoice addressed to a megacorp isn’t a guarantee. Make sure to check the company’s credit rating to avoid any regrets down the road. Payment due dates are usually set to 15, 30, or 60 days. Now it’s time for some magic: create an invoice using our tips. Remember, it can be handwritten or typed and sent electronically or using the traditional mail service. If you’re still not sure how to create an invoice, do not hesitate to Google free printable invoice templates and use them, or use a free software that’ll do it instead of you.  We’ve answered your question, how does an invoice work? Now, it’s time to send it to your customer. When it comes to timing, invoicing on the spot works best if you’re doing small, one-off jobs. If you’re conducting a large-scale job, we recommend sending the invoice within 48 hours upon completing the work. For recurring services, the best option is to send a monthly invoice which is an administrative win-win.  Once your customer receives the invoice, the clock starts ticking. Now it’s only fair to ask yourself: how do payments work in case the client shirks his duty? Well, there are options for dealing with this situation. You can start a legal dispute, report your unreliable customer to the Business Reporting Bureau, or factor the unpaid invoices. While factoring might be the last resort, some businesses tend to employ the services of invoice factoring companies.  A finalized invoice is the one that has been paid in full by the customer on time. All completed invoices should be reconciled to make sure that you recorded the correct balance within your account. And don’t forget to check the payment terms beforehand every time you want to close a deal. How do PayPal invoices work? Those of you who have been wondering if it’s possible to invoice customers via PayPal can set their minds at ease. Not only is it possible, but it’s also free and easy. You can find the PayPal invoice tool on your account section, and from there, you can choose one of its invoice templates, customize them if you wish, or create your own. PayPal will email your customer a link to the invoice and even translate it if you’re sending it internationally. Your customer can pay via PayPal, PayPal credit, or with a credit or debit card. Plus, you get the option to manage your invoices. How do eBay invoices work? This option might seem like a can of worms, but it’s not. We’ll dumb it down. With eBay, users usually pay via eBay checkout. Alternatively, you can get your money by sending an invoice from either My eBay or Seller Hub tabs.  There you’ll find the simple invoice template that you can revise or simply add payment details to. Under the eBay invoice tab, you can also check the summary of your monthly sales, which can help your business analytics.  

If you’re just starting out with your small business, you’ll probably be satisfied with the services of a regular bookkeeper. They’ll be in charge of getting your finances organized, keeping track of sales, income and expenses, and executing payrolls. However, as your business appetites grow and your company scales, you might ask yourself whether this role should be taken to a higher level as well. In this article, we’ll answer the “What is full charge bookkeeping?” question and explain the job’s duties, responsibilities, educational requirements, and more. Who Are Full Charge Bookkeepers? FC bookkeeping is a term that refers to professionals who are fully responsible for a small or medium-sized business's full-cycle accounting and bookkeeping needs. They usually have more responsibilities than regular bookkeepers and are often in touch with the company’s CEO and upper management.  Larger companies sometimes have the assistance of an outside certified public accountant to review and audit more complicated financial statements and tax returns. If the company grows to the size of a corporation, the full charge bookkeepers’ duties are shifted to a controller. The full-charge bookkeeper job description goes beyond the usual responsibilities that typical bookkeepers have. Like regular bookkeepers, they keep records of finances, bank transactions, income and expenses, create monthly or weekly statements, and run payroll and timesheets. However, on top of all that, they have certain accounting duties: gathering insights from all the tracked financial data and preparing financial records and budget forecasts. They also ensure that business practices comply with laws, compute taxes, and prepare tax returns.  No matter how much bookkeeping and accounting duties might differ, a full service bookkeeping job combines some features of both. Full Charge Bookkeepers vs. Accountants  Even though we’ve gone through the main full charge bookkeeping responsibilities, let’s delve deeper into how an FC bookkeeper’s career differs from that of an accountant. Full charge bookkeeper duties include many accountant duties, also adding bookkeeping to the bundle. While a regular bookkeeper mostly deals with maintaining the ledger, an accountant is engaged with managing day-to-day financial activities, such as: Financial accounting Preparing financial statements Auditing Tax preparation Consulting services on financial matters When we compare a full charge bookkeeper vs. an accountant, we can clearly see that the main difference between the two jobs is that an accountant deals with financial analysis and has to be familiar with tax laws. They usually have a bachelor’s degree in accounting or a related field and often pass an exam to get a certification and become certified public accountants. Certified public accountants, on the other hand, have greater powers, and are entitled to prepare audited financial statements, represent taxpayers and companies before the Internal Revenue Service, and conduct external company audits.  What is the full charge bookkeeper’s role in comparison to an accountant’s, then? Although FC bookkeepers do provide accounting services, they usually don’t act as financial advisors or deal with auditing and tax reports. Full charge bookkeepers usually seek external assistance from a certified public accountant or a controller.  Full Charge Bookkeepers vs. In-House Bookkeepers As we’ve seen earlier, the duties of an in-house bookkeeper frequently overlap with those of an FC bookkeeper. However, a regular bookkeeper often works in a company where there is a fully staffed accounting team that deals with business accounting tasks. The role of a bookkeeper is to perform basic tasks such as: Tracking bank transactions Recording cash receipts Creating financial statements Data entry Limited accounts payable Accounts receivable work Now, let’s take a look at full charge bookkeeper vs. bookkeeper job descriptions and compare them.  While regular in-house bookkeepers deal exclusively with bookkeeping services and should possess basic data-entry and math skills and be familiar with the use of online bookkeeping and accounting software, the duties and responsibilities of full charge bookkeepers are much broader. They should also prepare financial statements, maintain the ledger, and perform all the other bookkeeping services.  However, they are also in charge of some accounting services, too. They will perform tax-related and payroll tasks, coordinate tasks with certified public accountants, and prepare information for auditing purposes. Full Charge Bookkeeping Educational Requirements We’ve already mentioned some of the skills that full charge bookkeepers should possess, but we’d like to focus more on their educational background.  First of all, bookkeeping doesn’t require obtaining a college diploma, unlike accounting. To become a bookkeeper, a high school diploma or equivalent and some basic bookkeeping knowledge are enough. However, knowing that there are various types of bookkeeping methods and lots of math and calculation involved, a bookkeeper should have math, data entry, and computer skills. If you wish to work your way up and earn a full charge bookkeeper salary, you’ll need to get formal qualifications and obtain an associate’s or bachelor’s degree in accounting, business administration, or a related field. Some of the courses you might enroll in are tax procedures, business law, payroll accounting, economics, and business math. Some professionals who’d like to work in larger companies with more complicated accounting-related tasks would often go the extra mile and acquire the Certified Bookkeeper (CB) designation from the American Institute of Professional Bookkeepers or the National Association of Certified Public Bookkeepers. To get one, you’ll have to have at least two years of professional experience in the field and pass the exam. Knowing what is included in full charge bookkeeping services makes you aware that a degree, skills, and certifications sometimes aren’t enough. Due to the higher level of responsibilities that FC bookkeepers have, some employers insist that candidates have prior bookkeeping and accounting experience. Those who decide to hire applicants without prior experience would require them to undergo at least six months of on-the-job training to learn about handling payroll, using accounting and bookkeeping software, and the bookkeeping practices the company prefers.  Salary Prospects Even though they are not as well-paid as accountants, full charge bookkeepers definitely earn more than regular bookkeepers. Depending on the level of education, years of experience, certifications, and additional skills, the full charge bookkeeping salary in the United States ranges from $37,770 to $47,250. The average base salary per hour is $24.11 as of December 2022. Final Thoughts Depending on your company’s size, the way it’s structured, and the level of expertise required, you might decide whether you need to hire a regular or full charge bookkeeper. Your business would benefit from a full charge bookkeeper if it’s scaling and you can’t handle managing the books and performing full-cycle accounting tasks.  A full charge bookkeeper with certification can help you with recording transactions, processing accounts payable, managing payroll, and doing taxes. When needed, you can hire a certified public accountant to coordinate with an FC bookkeeper and help with audits and tax returns.