Deciding between an Accountant or a Bookkeeper
What is the difference between an Accountant and a Bookkeeper? I have spoken to people who are not sure of the differences between an Accountant and a Bookkeeper and I understand because the two positons are so closely related.
- Makes journal entries, corrections, and monitoring
- Reviews the bookkeeping entries
- Prepares the financial statements and related notes
- Works with your budgeting, tax planning and is the head of many departments such as payroll, accounts payable, accounts receivable.
- Accountants monitor the health of a business, which is the cash flow tracked by these departments.
- Accountants audit your company to make sure all the financial process is according to standards and or law.
- An accountant is to advise your company when making financial decisions to save the company money and help to plan for the next steps.
- Your accountant prepares your annual financial transactions for tax preparation. The accountant also helps to track and detect fraud in your business.
- Your Accountant works with you to grow your business. Your accountant does not run your business. The job of your accountant is to help you stay compliant, helps you to grow better financial management skils that help you financially.
A Bookkeeper- Now the software can assist you with this process and your accountant would manage or train you how to use your software for bookkeeping. Your software is not your accountant.
- A bookkeeper usually makes the transaction entries and provides those entries to your Accountant.
- Bookkeepers work in the accounts payable, accounts receivable, and payroll departments.
- Bookkeepers process invoices, checks, timesheet, collections, and many more financial recording and balancing tasks
What you experience when you do not have an accountant:
Example 1: Company X needs a new product but does not know if the company has enough funds to develop a new product.
Example 2: Company Y did not truly know how much money was earned or spent in a year because of lack of bookkeeping and accounting.
Example 3: Company Z did not track the amount of money made nor expenses, and now the IRS estimates from deductions reported by others, and charges company z $100,000.00 in under-reporting fees and penalties.
The loss of money and time is tremendous when you do not have an accountant or bookkeeper. How do you plan or how do you project and grow, if you don’t know your financial status. Some Accountants only prepare taxes so choose an Accountant that can provide accounting services throughout the year as well as bookkeeping services all in one package.