For those who may be new to the world of business and have just started their own small company, it can be hard to know whether you need the services of a bookkeeper, an accountant, or both. As they offer similar services, and the terms ‘bookkeeper’ and ‘accountant’ are relatively interchangeable, the choice can be puzzling at first. So, let’s take a closer looker at the two roles:
What exactly does a bookkeeper do?
The job description literally describes the duties of a bookkeeper; they keep the books and retain documentation for transactions. Often, bookkeepers begin their careers as data-entry clerks or entry level bookkeepers for businesses, and as they grow in their role through experience and merit, they work towards becoming an important person who records the day to day finances.
As is sometimes the case, experienced or certified bookkeepers move on to the role of an accountant, and their focus then shifts to reporting, business analysis, and even giving advice and guidance on accountancy matters. Within some companies, bookkeepers and accountants work in unison, with the bookkeeper operating on the ground level, so to speak, and taking on the responsibility of establishing and promoting a stronger relationship between the accountant and business owner.
What does an accountant do?
Accounting or accountancy is the recording and measuring of financial information within a company that is relayed to the managers, investors and tax authorities to help them make informed decisions about how best to allocate the available resources.
Accountants take on a role of higher responsibility within small businesses and may have certification to back up their credentials.
As a small business owner, how do you know whether you need a bookkeeper or an accountant?
The type of industry that your business operates in may affect the choice, along with whether you have a fixed number of assets or a large amount of inventory. Employee numbers can also affect your options, and how complicated your company’s business dealings are. The more complex an organisation, the more crucial it becomes to make sure that your bookkeeper is fully supported by a good accountant or CPA who can give extra advice and guidance if needed.
Having a bookkeeper and an accountant within your small business can prove to be great relationship that impacts positively on your bottom line, provided communication is kept open and data is strong.