Do I need a bookkeeper or accountant?
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 many business owners, you may not be exactly sure of the differences between a bookkeeper and accountant; and whether you should hire one, or both.
An established, growth-focused company will employee the services of both an accountant and bookkeeper. The two professionals 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. Or hire a part-time bookkeeper until it makes sense to bring someone on full 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 recording the small but important details that are essential for providing an accurate picture of where a business stands at any given moment.
A bookkeeper’s main job is making sure every financial transaction is accurately recorded in the general ledger. However 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 daily, 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.
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 analysing, summarising, 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. They can help with budgeting, forecasting, and decision making – as well as strategic tax advice, and identifying opportunities to reduce costs and maximise 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.
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. You also have 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. An accountant can do so much more than handle your taxes. Think of your accountant as a trusted business partner. This is someone you rely on year round for advice on how to increase profitability as you take steps to achieve your business goals.