Bookkeeper vs Accountant: Understanding the Difference
Most business owners know that they need someone to handle their finances, but they may not be sure whether they need a bookkeeper or an accountant. While both professions deal with financial matters, there are some key differences between them.
What is a Bookkeeper?
A bookkeeper is primarily responsible for recording and keeping track of all the financial transactions made by your business. This includes sales, purchases, receipts, payments, and anything else that affects your company’s finances. A bookkeeper ensures that all this information is accurately recorded in your company’s books.
To effectively do this job, a bookkeeper must have strong math skills and be highly organized. In addition, they should be familiar with accounting software and have a basic understanding of accounting principles. While you don’t need to be a certified accountant to work as a bookkeeper, many employers prefer to hire candidates who have at least some college-level accounting coursework under their belts.
What is an Accountant?
An accountant, on the other hand, provides more strategic advice and guidance on financial matters. They can help you make decisions about how to grow and manage your business finances in the most efficient way possible. An accountant can also prepare and file your company’s tax returns. They may work for a single company or organization, or they may work for a public accounting firm that provides services to multiple clients.
Most accountants in Southend have a bachelor’s degree in accounting or a related field. Some also have a master’s degree in accounting or business administration. To become a certified public accountant (CPA), accountants must pass the Uniform CPA Exam. CPAs are licensed by state boards of accountancy and must meet continuing education requirements to maintain their license.
In addition to CPAs, there are other types of credentialed accountants, such as certified internal auditors (CIA) and certified fraud examiners (CFEs). These professionals specialize in specific areas of accounting and have additional training and experience in those areas.
Should You Choose a Bookkeeper or an Accountant?
When you’re running a small business, you wear a lot of hats. You’re the marketing director, the sales manager, the customer service representative, and the janitor. Oh, and don’t forget your day job! With so much on your plate, it’s easy to let some important tasks fall by the wayside.
One area that is often neglected is bookkeeping and accounting. This is understandable-after all, who wants to sit down and do the math when there are so many other things that need to be done? But keeping track of your finances is crucial to the success of your business, so it’s important to make sure that you have someone who is qualified and trustworthy handling this important task.
So, how do you choose between a bookkeeper and an accountant? Here are a few things to consider:
1. What is your budget?
This is probably the most important factor in deciding between a bookkeeper and an accountant. While both professionals can provide valuable services, they do come with different price tags. Accountants tend to be more expensive than bookkeepers, but they also offer a wider range of services. If you have a limited budget, a bookkeeper may be a better option for you.
2. What services do you need?
Another thing to consider is what services you need. If you only need someone to keep track of your income and expenses, a bookkeeper may be all you need. However, if you also need help with filing taxes or preparing financial statements, an accountant may be a better choice.
3. What is your level of experience?
If you’re new to running a business, it may be beneficial to hire an accountant who can provide guidance and advice on financial matters. On the other hand, if you’re more experienced and comfortable managing your own finances, a bookkeeper may be all you need.
4. What is your comfort level?
This ties in with the previous point if you’re not comfortable managing your own finances, it may be worth it to pay for the peace of mind that comes with having an accountant on staff. On the other hand, if you’re confident in your abilities and comfortable handling financial matters yourself, a bookkeeper may be a better option for you.