A popular question we get is, what’s the difference between a bookkeeper and an accountant? A good question! They both work with financial data and they’re both essential for managing a successful business. Yet the roles and duties of a bookkeeper and accountant are different. You may not be exactly sure of the differences between a bookkeeper and accountant. Knowing the difference can help you decide whether to hire one or both.
An established, growth-focused company will employ the services of both an accountant and bookkeeper. The two professionals work in tandem to ensure business financials are up to date, accurate, and carefully monitored.
If you are in the early stages of your business, you might choose to do the bookkeeping yourself or hire a bookkeeper part time. An accountant, however, should be a key player on your team from day one.
A look at bookkeeping for small business
The primary role of a bookkeeper is to handle a company’s day to day financial management. A bookkeeper will take care of the small but important details that are essential for providing an accurate picture of where a business stands at any given moment.
In addition, a bookkeeper may also lend a hand with other key tasks like invoicing, paying suppliers and vendors, and processing payroll.
Ideally a company’s books are updated at the end of each business day, so you always have a true account of your sales, expenses, and the bottom line. If your business is still in its early stages, aim to reconcile your own accounts at least once a week.
Why you need an accountant
An accountant’s primary role is to help companies make sense of their numbers for the purpose of strategic planning. This includes analyzing, summarizing, interpreting, and reporting on financial data in order to provide “big picture” business advice.
As a small business owner, you’ll want to work with an accountant from the early stages of the business to help with budgeting, forecasting, and decision making. Accountants will also be able to provide strategic tax advice and identify opportunities to reduce costs and maximize profitability.
Many business owners think they only need to talk to their accountant once a year, at tax time. However, to be able to gauge the health of your business, and make the most of your accountant’s expertise, it’s recommended you check in at least once a month.
Your monthly meeting is a chance to review key reports, like your profit and loss statement, discuss opportunities or areas of concern, and get timely advice to help meet the goals you’ve set out in your annual business plan.
Final thoughts
As your business grows, it’s essential to have trusted financial professionals managing your books and providing strategic financial advice. After all, the busier you get, the more complex financial management becomes, and the less time you’ll have to maintain your books and try to make sense of all the data.
A trustworthy bookkeeper is essential for a thriving business and an accountant can do so much more than handle your taxes. Think of your accountant as a trusted business partner whose services you rely on year round for advice on how to increase profitability as you take steps to achieve your business goals.
If you are looking to fill the role of both a bookkeeper and accountant for the business, consider the benefits of outsourcing these functions to a professional staff. Deciding to outsource your bookkeeping and accounting functions will help you save time, money, reduce liability, and increase profitability.
P.S. Find out how our outsourced bookkeeping and accounting services can fill both roles and more for much less!