Accountants and Bookkeepers. They basically do the same thing, don't they? Well.. not exactly.
While the tasks often overlap, there are significant differences in the role each play to the success of your business. So what are they? And how do you decide which you need?
Let's first take a look at the definition of each.
A bookkeeper is a person who is responsible for the day-to-day financial transactions that keep your business running smoothly. An accountant is a person who is responsible for analyzing the data provided by the bookkeeper and is best able to offer tax, audit, and compliance advice.
Next, let's take a look at the tasks each could be expected to perform.
Bookkeepers are an essential part of your business and take on the tasks related to the ongoing maintenance of your financial records. These tasks may include:
- Transaction recording and classification
- Account reconciliation
- Managing Accounts Receivable and Accounts Payable
- Maintaining and managing the general ledger and Chart of Accoutns
- Preparing initial financial statements
- Processing payroll
Accountants are also an essential part of your business and while they are also qualified in the same areas as a bookkeeper, they typically take on more of the advisory and analytical tasks such as:
- Examination and analysis of financial records, statements, and reports
- Risk analysis
- Tax advice, planning, preparation, and compliance
- Auditing services
Now, how do you determine which you need?
It really comes down to what will work best for your business, but some of the things to consider when deciding whether you need an accountant or bookkeeper or both include:
- Number of assets
- Amount of inventory
- Number of employees
- And of course, Budget
One thing to keep in mind regarding budget is that although accountants are able to do the same work as a bookkeeper they often charge a significantly higher fee, so it is recommended that extra consideration be taken when deciding which tasks to delegate where.
The bottom line is that your accounting and bookkeeping processes contribute to the long-term success of your business so, regardless of who you choose to delegate these tasks to, it's important to be sure you have both bases covered and that they work well together.