The Main Difference Between a Bookkeeper and Accountant

Bookkeepers and accountants are not the same. Bookkeepers focus on daily/weekly/monthly tasks, providing information but not any opinions. A CPA has a higher level of expertise, having completed additional certifications. They provide advice and other analysis, including certified year end financial statement preparation, tax returns, and dealing with the IRS and tax laws.

Accountant

So what are a small-business owner’s options for professional help with financial tasks? Does your business need a bookkeeper or an accountant?

Actually it’s a trick question. You may need both.

Many times it depends on the industry and the level of expertise required. Questions to ask yourself include: What industry is your company is in? Do you maintain a number of fixed assets or a large amount of inventory? How many employees do you have? The more complex the organization, the more important it is to make sure that the company’s bookkeeper is also supported by a good CPA who can provide advice as and if needed. It’s a great partnership that keeps communication open and data strong.

Small-business owners are often told that they should hire a professional to help with the accounting side of their companies. Because both bookkeepers and accountants offer financial services, understanding which one you need can be puzzling.

acountantAn accountant can analyze the big picture of your financial situation and offer strategic advice. He or she produces key financial documents, such as a profit-and-loss statement, if needed, and files a company’s taxes each year.

After tax season is over, an accountant can also act as an outsourced chief financial officer, advising an entrepreneur on financial strategies, such as whether to secure a line of credit against receivables when introducing new products or services.

The term “bookkeeper” is pretty literal: The bookkeeper keeps the books and retains documentation for transactions. A bookkeeper does the day-to-day hands-on tasks: making sure new employees file all the right paperwork for the company’s payroll,  promptly submitting invoices and following up on them, and paying the bills. The bookkeeper also tracks company expenses and can assure that every cost has been entered — and recorded correctly — into software like QuickBooks so that the business is ready for tax time along with filing any other reporting to, say, creditors or investors. A good bookkeeper can also be a warning — bringing attention to something that might need higher levels of advice.

Many times a bookkeeper and accountant work in tandem, with the bookkeeper operating as a “feet on the ground” professional, promoting a stronger relationship between an accountant and a business owner.programs-accounting-technology

Be sure to seek out a bookkeeper or an accountant who can speak to you in layman’s terms. Don’t be afraid to stand up and say, “I’m not fully understanding what you are telling me. Can you rephrase that?” Accounting can be a language all its own. Professionals can be very good at what they do, but they also need to be able to explain concepts easily.

Additionally, most accountants and bookkeepers are happy to answer a few questions, and they enjoy being able to see a business grow and for clients to be successful. After all, the basement startup today could be their biggest client tomorrow.

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