They both work with financial data; they’re both essential for managing a successful business. Yet the roles and duties of a bookkeeper and accountant rarely overlap.
If you’re like – and whether you should go to an accountancy practice, hire one or hire both.
A large and well established company will be able to acquire a finance team that will include at least a bookkeeper and an accountant An established, growth-focused company will employ the services of both an accountant and bookkeeper. The two professions work in tandem, to ensure business financials are up to date and accurate, and the financial health of the company is carefully monitored.
If you’re still in the early days of your business, you might choose to do the bookkeeping yourself, this is fine but you must ensure that you know what you are doing. The accountants role should always be carried out by a qualified professional – it is more cost effective to outsource this function.
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 to a bookkeeper’s main job – making sure every financial transaction is accurately recorded in the general ledger – they 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, however – without a lot of financial activity or the funds to hire a bookkeeper – you should aim to reconcile your own accounts at least once a week – never get behind on your bookkeeping!
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 – 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 very early days to help with budgeting, forecasting, and decision making – as well as for strategic tax advice, and identifying 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. But in order to be able to truly 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. If you only meet your accountant once a year you lose out on up to date reports which can in some cases be the reason for a company going out of business.
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’s services are 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 – someone whose services you rely on year round for advice on how to increase profitability as you take steps to achieve your business goals.