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What Does a Bookkeeper Do?
Everything small business owners need to know: from what a bookkeeper actually does, to costs, software, red flags, and how to find the right one.
What Does a Bookkeeper Do?
A bookkeeper records all your financial transactions. A bookkeeper sets up the software, connects your bank feed to keep track of what is coming in and going out, and then codes all those transactions into categories. That starts building a picture of what you are earning and what you are spending your money on. It gives you the visibility to see how your business is performing: where you’re spending money, where you can save and where things might be off track, so you can make better financial decisions going forward.
Important distinction: Most people searching for a bookkeeper are actually looking for a registered BAS agent. A BAS agent is qualified to handle GST coding, payroll, super, compliance lodgements, and liaise with the ATO. A general bookkeeper has far more limited scope. See the section below on registration for more detail.
What Does a Typical Week Look Like?
Day to day, a bookkeeper will go into your accounting file, look at where money has been spent, find receipts and bills, and match them up, making sure all the GST details and transaction categories are correct. Beyond that, a typical week might include:
- Reviewing outstanding bills and advising you on what needs to be paid
- Reviewing outstanding invoices and following up on overdue customer payments
- Running payroll
- Liaising with the ATO if compliance needs to be brought up to date, such as BAS or STP filing
- Checking super liabilities
- Reviewing the balance sheet and profit and loss for accuracy
- Speaking with you to catch up on any issues or recent business activity
The accounting file referred to here means software like Xero, QuickBooks, or MYOB. That is where all the records live.
Bookkeeper vs Accountant: What Is the Difference?
The accounting file referred to here means software like Xero, QuickBooks, or MYOB. That is where all the records live.
| Bookkeeper / BAS Agent | Accountant |
|---|---|
| Day-to-day transaction recording | Big-picture financial planning |
| GST coding and BAS lodgement | End-of-year tax return |
| Payroll and super compliance | Tax minimisation strategy |
| STP filing | Financial advice |
| ATO liaison and compliance | Reviews bookkeeper's work |
| Profit and loss and balance sheet review | Works from figures the bookkeeper provides |
| Invoice and bill management | Not typically involved in day-to-day transactions |
| Ongoing, month-to-month work | Typically engaged at tax time |
Accountants are looking at the big picture. They take the information from the accounting software and give you tax advice, financial planning, and strategies for minimising your tax at the end of the year. They do not do the day-to-day work, and often, when they try, it is a rushed job.
What a bookkeeper does is make sure everything is recorded correctly so that when you go to the accountant, you can have confidence knowing it is all up to date and right. That is a real advantage come tax time.
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Common mistake: Many business owners go straight to an accountant when starting out, thinking that is what they need. In most cases, a bookkeeper first and an accountant at tax time is the more cost-effective approach. |
Why Keeping Your Books Up to Date Matters
A lot of people just see money in the bank and think their business is fine. But they do not really understand the numbers behind it. They end up constantly chasing sales and not really understanding where they are spending their money.
By keeping everything up to date and tracked, you can start to see where you are overspending, cut what does not need to be there, and give yourself more financial freedom. It is the difference between running your business and being run by it.
Real example: One client had 10 years of BAS returns outstanding. The ATO was chasing them and was on the verge of cancelling their ABN, which would have meant shutting down their business entirely. Getting everything caught up cost around $4,000. Done preventatively, it would have been significantly cheaper and far less stressful.
Once you register your ABN and then register for GST, if you stop lodging BAS statements, keeping up with single touch payroll, or staying on top of other compliance obligations, the ATO will start chasing you. They may leave it a few months, or for some people it is a year or two, but they do start chasing. That is when people realise they are really in trouble. They start losing sleep, they do not know if they can take a holiday, they do not know what their business actually looks like. It is a really bad situation.
Common Bookkeeping Mistakes Small Business Owners Make
The most common error when business owners manage their own books is coding GST incorrectly. For example, putting GST on bank fees, or on a cash ATM withdrawal. If the ATO audits and finds this, the business may owe a significant amount back, plus fines.
Food is a particularly grey area. Some foods are GST-free (fresh), others are not (prepared). A business owner who puts all food purchases through as GST-claimable without knowing the rules can end up with a substantial debt after an audit. And once you have been audited, the ATO tends to keep a closer eye on you.
What Is Coding?
Coding means allocating a transaction to the right category in your accounting software. A BAS agent will look at the receipt, determine what the purchase was for, and code it correctly. Here are some examples:
| Transaction | Correct Category | GST? |
|---|---|---|
| Fuel at 7-Eleven | Motor vehicle expenses / Fuel | Yes |
| Stationery at Officeworks | Printing and stationery / Office expenses | Yes |
| Bank fees | Bank charges | No |
| ATM cash withdrawal | Owner drawings / Not a business expense | No |
| Fresh food purchase | Meals / Entertainment | No (GST-free) |
| Prepared/takeaway food | Meals / Entertainment | Yes |
People often just put everything into a general expenses category without understanding what it means at the end of the day. That makes your profit and loss meaningless and creates risk at tax time.
Do Bookkeepers Need to Be Registered in Australia?
This is where a lot of people get confused. In Australia, there is a meaningful difference between a bookkeeper and a registered BAS agent.
| Registered BAS Agent | General Bookkeeper |
|---|---|
| Registered with the Tax Practitioners Board (TPB) | Not registered with the TPB |
| Completed required study and hours | May hold a Cert IV or similar |
| Can code GST transactions | Cannot advise on or code GST |
| Can lodge BAS and handle ATO compliance | Cannot lodge compliance-related items |
| Can manage payroll, super and STP | Limited payroll scope |
| Must maintain continuing professional education | No ongoing CPE requirement |
| Must hold professional insurance | No insurance requirement |
| Can liaise with the ATO on your behalf | Cannot represent you to the ATO |
You can verify whether someone is a registered BAS agent by searching the TPB website. If you want someone who can handle payroll, code GST transactions, set up software, and manage your compliance obligations, you need a registered BAS agent, not just a bookkeeper.
BAS agent is now genuinely a profession. Registered agents have to spend significant time staying up to date, complete continuing professional education, and hold insurance. It is not just bookkeeping anymore.
Which Accounting Software Is Right for Your Business?
The right software depends on two things: what you can afford, and how much of the bookkeeping you will be doing yourself.
| Software | Best For | Notes |
|---|---|---|
| Xero | Most small businesses; DIY-friendly owners | User-friendly, clean interface, strong Australian market presence. More expensive than QuickBooks at baseline. |
| QuickBooks | Cost-conscious businesses | Still user-friendly but more technical on the bookkeeping side. Good lower-cost option. |
| MYOB | Established businesses with complex needs | Powerful but can be more complex to navigate. Easier to make a mess of if you're doing it yourself. |
Xero has the strongest foothold in Australia right now. It is cleaner, brighter, and easier for business owners to understand. That said, for some start-ups, even Xero’s baseline product is more than they need to spend. A bookkeeper can help you make the right call based on your situation.
Cloud-based systems have also changed the game significantly. You can log in at 10 o’clock at night and see exactly what has happened that day. Bank feeds are nearly live now, which means you and your bookkeeper are always working from up-to-date information. That makes for much better advice.
Receipt capturing apps like Dext or Hubdoc are also worth considering. Hubdoc is free with Xero. Having a reliable way to capture and store receipts makes a bookkeeper’s job easier and your records more accurate.
What Does a Bookkeeper Cost?
Pricing depends on the size and complexity of your business. Most bookkeepers will spend some time in your file before quoting a fixed monthly fee, which is the most common pricing model for ongoing work.
| Business Size | Approximate Monthly Cost | What Is Typically Included |
|---|---|---|
| Very small (sole trader, minimal transactions) | $100 to $300/month | Basic transaction coding, BAS lodgement |
| Small (tradie with 1 to 2 staff) | $300 to $600/month | Coding, payroll, BAS, super, compliance |
| Medium (5 to 6 staff, weekly bookkeeping) | $800 to $1,500+/month | Full accounts payable, payroll, reporting, compliance |
A good bookkeeper will generally give you one fee that covers everything you need, rather than itemising bookkeeping, payroll, and BAS separately. The factors that influence cost include the number of bank transactions, staff headcount, whether you need accounts payable management, how often you need reporting, and how much compliance work is involved.
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On ROI: You almost cannot afford not to have a bookkeeper. Misallocating transactions, lodging things incorrectly, or leaving everything to the accountant at year end will likely cost you more in the long run. A bookkeeper ensures things are done correctly as you go, so you are not paying for a big fix-up job at tax time. |
Green Flags and Red Flags When Choosing a Bookkeeper
Small business owners tend to make uninformed decisions when seeking help with their accounts.
| Green Flags ✔ | Red Flags ✘ |
|---|---|
| Registered BAS agent (check the TPB website) | Not registered with the TPB |
| Proactive communicator | Significantly cheaper than the market rate |
| Consistent and delivers work on time | Poor or infrequent communication |
| Certified in your accounting software | Late with financial reporting |
| Works smoothly with your accountant | Not insured |
| Takes time to understand your business | Negative account balances appearing in Xero |
| Transparent about pricing | Unexplained drops in profit figures |
Someone who is a lot cheaper than other bookkeepers can sometimes mean they have not spent the time to build their skills, or they are not properly insured. That can cost you more down the line. I’m in it for the long haul with my clients.Â
What Does the Onboarding Process Look Like?
A good bookkeeper will take the time to properly understand your business before getting started. A typical onboarding process looks like this:
| Step | What Happens |
|---|---|
| Initial call | Quick phone conversation to understand your situation and what you need |
| Discovery meeting | Zoom or in-person meeting to go deeper: your staff, business structure, what you want to see in your profit and loss, pain points |
| Software recommendation | Advice on whether Xero, QuickBooks, or MYOB suits your needs, plus any supporting apps (e.g. receipt capture) |
| Setup | Bookkeeper sets up the software, connects bank feeds, and configures categories |
| Letter of engagement | Formal agreement sent, initial invoice issued, work begins |
| Ongoing check-ins | Regular communication by phone, Zoom, or in person depending on your location and preference |
Some business owners decide to manage their own books after the initial setup, and that is perfectly fine. A bookkeeper can get you started properly and leave you in a good position. That said, most find they come back after a few months when the volume or complexity gets on top of them.
Frequently Asked Questions
What is the difference between a bookkeeper and a BAS agent?
A general bookkeeper can record transactions but cannot advise on GST, lodge compliance documents, or manage payroll in a compliance capacity. A registered BAS agent is qualified and registered with the Tax Practitioners Board to do all of that. Most small businesses need a BAS agent, not just a bookkeeper.
Can a bookkeeper pay my bills for me?
Yes, though this typically comes after a period of building trust in the relationship. Initially, most bookkeepers will prepare an ABA file that you upload to the bank yourself. Once there is an established working relationship, bank access can be arranged if needed.
Do I need a bookkeeper or an accountant when starting a business?
Most new business owners should look at getting a bookkeeper first and worrying about the accountant at tax time. A bookkeeper sets up your software, keeps your records current, and handles compliance throughout the year. An accountant then works from those clean records to do your tax return and advise on your financial position.
How do I know if my bookkeeper is doing a good job?
Your profit and loss should make sense and reflect what is actually happening in your business. Your BAS lodgements should be on time. You should be hearing from your bookkeeper regularly, not just at the end of the quarter. Red flags include negative account balances, unexplained drops in profit, and silence.
What if I want to do my own bookkeeping?
That is perfectly fine for some business owners. If you go that route, make sure you have a way to capture and store receipts (an app like Dext or Hubdoc works well), and do not be afraid to ask questions. No question is too basic when it comes to your own money. Many business owners who start out doing it themselves do eventually bring in a bookkeeper as their business grows.
Ready to get your books in order?
Working with a registered BAS agent means your records are accurate, your compliance is up to date, and you always know where your business stands. That is the kind of clarity that lets you run your business with confidence.