Businesses need financial expertise to ensure they have the right tools to assess the financial health of their business. Whether you are just starting your business or in a growth phase, one crucial consideration is what type of expertise you need to manage your business’s books and produce financial reports. Accountants and bookkeepers typically meet many of the financial needs of companies. In addition, both accountants and bookkeepers can help you with your financial records.
However, while they are similar in many ways, these two professionals play different roles in your company’s financial operations. Thus, it’s essential to understand their differences and decide which one (or both) could benefit your business.
What are the responsibilities of bookkeepers?
Bookkeepers can help you keep your business transactions organized and updated. Typically, they will focus on the details of the transactions of your business.
Generally, a bookkeeper will be responsible for the following:
- Recording transactions
- Reconciling bank accounts
- Prepare basic financial statements and reports
- Manage to invoice
- May also manage accounts receivable, payables and payroll.
What are the responsibilities of accountants?
Typically an accountant focuses on the bigger picture of the financials of your business.
Accountants can provide their expertise and are responsible for the following:
- Produce financial statements
- Reviewing, analyzing and interpreting financial data
- Tax planning and preparation
- Auditing and assurance services
- Business advisory services include budgeting, cash flow analysis and financial forecasts.
Do I need an accountant or a bookkeeper?
Choosing whether to use a bookkeeper or an accountant can be vital for your business. You can manage your financials with the help of a bookkeeper if you have a small business with more straightforward transactions. However, if you have a large company with more complex financial needs, you may need the expertise of an accountant to help you manage your finances. Ultimately, it is crucial to assess the needs of your business and determine which role is best for you.
Stage of business
The stage of your business can affect the decision to hire a bookkeeper or an accountant. For some businesses in the early stages of growth with only a few transactions, a bookkeeper might be sufficient for your needs. As you grow and have more complex tax needs or are looking to raise capital, consider hiring an accountant in addition or instead of a bookkeeper.
Other businesses may need an accountant’s expertise right at the outset. For example, you may operate in an industry with complex transactions or regulations that require regular tax and financial advice. In that case, you might need an accountant right away.
Your expertise and time as a business owner might play a role in whether you hire a bookkeeper or accountant. For example, if you are well versed in financial topics, a bookkeeper can help you organize your transactions while you can review the financial statements they produce.
However, an accountant may be more beneficial if you need to become more knowledgeable in financial matters and need assistance understanding your business’s financials. An accountant can provide financial advice and analysis to help you make better decisions about your business.
They can also help you with tax planning, budgeting and forecasting to ensure you are taking the proper steps for the success of your business.
The complexity of your business
Whether you need an accountant or bookkeeper might depend on the complexity of your business. If your business is relatively simple, maybe with one line of business, and predictable cash flows, a bookkeeper can help you record your transaction and ensure that your books are up to date.
On the other hand, if you operate in a more complex business model, with several lines of businesses, uncertain cash flows, or complex transactions, an accountant can help provide expertise to manage your financials. For example, let’s say your business is more technical and can use SR&ED credits from government programs. In that case, an experienced accountant might be ideal for your business to take advantage of it.
On the other hand, simpler business models might be okay with a bookkeeper.
Find the right financial expert for your business needs.
Hiring people to trust with the financials of your business can be a crucial decision. You want the proper expertise that is cost-effective while aligned with the needs of your business.
Accountants and bookkeepers are professionals who can contribute to your business’s financial success if suited to your needs.
If you are in doubt about the needs of your business, it is essential to consult a skilled professional who can provide insight into the needs of your business.
CONSULT EDELKOORT SMETHURST CPAS LLP IN BURLINGTON FOR RELIABLE ACCOUNTING ADVICE
A skilled accounting professional can help you find ways to save time and costs on your accounting needs. At Edelkoort Smethurst CPAs LLP, our financial and small business experts can provide services to support your accounting function, whether you need partial or complete support. In addition, we can provide you with recommendations on structure and streamline your accounting function to work best for your business. To learn more about how Edelkoort Smethurst CPAs LLP can provide you with the best accounting expertise, contact us online or by telephone at 905-517-2297.