As you may know, accountants and bookkeepers perform very different tasks. Bookkeepers are the ones managing your general ledger and insuring your accounts balance every day/week/month. Accountants are tax experts and provide higher level insight into your business. So why not just get your accountant to do your books as well? It’s not that easy.
Here are four reasons you shouldn’t ask your accountant to do your bookkeeping:
1. They don’t understand your business
Most people only check in with their accountant around tax time. That means your accountant is only seeing your books once a year. That’s not really enough to get a full picture of what’s going on day-to-day inside your business. At tax time your accountant isn’t going to reconcile all your accounts. At most they’ll do the basics to get the numbers they need to complete your taxes. And if you do that, you’ll be missing out on all the information you can get from your books during tax time.
2. They’re not focused on the little things
A good bookkeeper will make sure your accounts are reconciled down to the penny. Your accountant? Not so much. They’re not typically worried about every little dollar in your account. They’re job is to look at the total picture of your business and understand your tax liability and where and how you can make changes to minimize that liability. A penny here or there doesn’t matter to them, but for the bottom line of your business, you need to know where those pennies are going.
3. They need separation from your numbers
One of the benefits of having an accountant is that they’re a fresh set of eyes across your financials at the end of the year. You want an objective review of your books and any insight they can offer on allocating your resources and improving your overall business performance. If you have them doing your books they could be so close to the numbers that they miss some of the larger trends. To make sure your accountant is giving you the strategic analysis you need, keep them out of your books.
4. They’re expensive
You’re probably paying your accountant quite a lot whenever they do your taxes. Imagine paying that every week or every few days when they’re reconciling your accounts. The cost per hour for an accountant is typically much higher than a bookkeeper. While it’s true a professional will be able to do your books a lot faster than you can, that hourly rate adds up. Since bookkeeping is labor intensive, hiring a bookkeeper will cost you less and provide you with a lot of the same expertise as your accountant.
Your accountant is still very much necessary. You’ll need them for tax time and they can be a great advisor for your business when it comes to your overall business performance. But asking them to do your bookkeeping is like asking your architect to build your house. In fact, most accountants will recommend having a bookkeeper separate from them. And a great bookkeeper will work directly with your CPA for a pain-free tax season. If you’re looking for a bookkeeper, get a free consultation with us today.