Your successful small business needs both a bookkeeper and an accountant. And there’s a reason why they won’t be the same person.
While some skilled bookkeepers and accountants may, in fact, be capable of doing each other’s work, an accountant’s services cost considerably more than a bookkeeper. There are other significant differences to be aware of.
A bookkeeper helps you maintain the ongoing financial recording of transactions to keep your business running smoothly. Specifically, they might:
- Process and record invoices, receipts, payments, and other transactions
- Process transactions for payroll and maintain those systems
- Set up, maintain and review accounting systems and processes
Some bookkeepers (including me) may also look after these additional activities for you:
- Reconcile accounts and prepare reconciliation reports
- Manage accounts receivable and accounts payable
- Prepare working financial statements
An accountant, on the other hand, provides analysis and professional advice, and keeps you compliant with laws and regulations. Specific activities which an accountant might do are:
- Analyze performance and create financial projections
- Provide tax advice and planning
- Help with new business set-up
- Audit records for compliance
- Prepare financial reports
- Give financial management advice
Both roles are extremely important to the success of your small business. They need to communicate well with each other in order for you to maximize on their contributions.