Fact or fiction: Accountants and bookkeepers do the same thing.
A lot of people think CPAs and bookkeepers perform the same job, but actually, there are quite a few differences between bookkeepers and accountants. The easiest way to differentiate the two professions is to think about it like this: Accountants and CPAs assess the financial data for a business, prepare income tax returns, and provide general business tax planning advice. Bookkeepers, on the other hand, manage the day-to-day functions for businesses – things like categorizing expenses in the general ledger, checking for data accuracy, reconciling bank statements, compiling daily data, and pulling financial statements together. Skilled bookkeepers tend to be specialized in specific industries and can provide additional value by setting you up with an industry-specific general ledger and helping you understand cashflow and cost-per-client as it pertains to your industry.
Now that the differences are understood, here’s why business owners should have both:
CPAs may struggle with transaction bookkeeping
Not to say CPAs can’t perform transaction bookkeeping by any means – of course they can. It’s that their line of work focuses more on looking at the bigger picture rather than everyday numbers for business activity.
Bookkeepers understand one-to-one tracking
What this means is that when you make a financial deposit, that same deposit is reflected in your file. In this sense, bookkeepers utilize accounting software the way it was meant to be used so that no data goes missing or misfiled and every transaction is accurately recorded. By doing so, they make sense of the data business owners care about most: cashflow.
Accountants are experts in tax
CPAs are the pros when it comes to preparing your business tax returns. They understand full tax compliance, important deadlines, and deductions. Accountants are able to look at the complete scope of financial information for a business and help you make better decisions for allocating resources for improving overall performance.
Bookkeepers free up your day
As a business owner, it’s likely that you’re already struggling to find enough hours in the day to run your business and have time for personal fulfillment. Working with a bookkeeper who not only keeps records of your day-to-day transactions, but also manages your expenses, payroll, bill payments and financial reporting can provide sanity and peace of mind for small business owners.
Building a team of experts is key
The idea of honing your expertise in a particular field means that you become the authority in that area – whatever it might be. Accountants and bookkeepers each concentrate on specific areas of work. When you build a team of experts that thrive in what they do best, you allow your business to reap greater financial benefits.
Get in touch with BKE today and let us help you build a team from the best of both worlds.