–Bookkeeping vs. Accounting–
If you’re a small business owner, you might be wondering if you need to get a bookkeeper or an accountant – or both.
And now that you understand the need for bookkeeping, you’re might be wondering, “How does it differ from accounting?”
The words “bookkeeper” and “accountant” are often used interchangeably. However, there are some key differences that determine the main responsibilities of each role.
–Bookkeeping is a Subset of Accounting–
An accountant, professional bookkeeper, or an employee of the business can do your bookkeeping.
If you’ve just started a business, chances are you’ll be doing the bookkeeping yourself.
This is no bad thing. When launching a new business venture, it’s crucial that you have an intimate grasp of your financial situation. What better way than to do the bookkeeping yourself?
Essentially, bookkeepers take care of the day-to-day financial work.
They keep detailed and accurate financial accounts and use this financial clarity to help make informed business decisions.
–Accountants are Financial Experts–
Accountants are usually qualified, registered members of a statutory association. So they often have titles like CPA (Certified Public Accountant) or CA (Chartered Accountants).
That’s how they can charge the big bucks.
These experts will use the accounts provided by the bookkeeper. They focus on analyzing the transactions to provide financial advice.
They’ll also use the information in the accounts to file tax returns and other reports.
Whereas bookkeepers handle the day-to-day financial tasks, accountants often step in on a quarterly basis to provide advice and make adjustments.