As your small business grows and changes, the financial data it generates becomes more and more important. If your company is moving past the early stages where you or a family member can handle the accounting work yourselves, who should you hire to help you out?
To find the right accounting assistance, here's a brief rundown of the roles of a bookkeeper and an accountant so you can make the best decision for your company.
What Does a Bookkeeper Do?
A bookkeeper is an all-around, daily accounting professional. They make entries in all aspects of accounting — accounts payable, accounts receivable, general ledger, and even payroll — daily and weekly. They are front-line workers, handling a variety of tasks ranging from entering bank transaction information to generating financial reports at the end of each month.
A bookkeeper excels at managing your accounting software, making sure that entries are created in a timely manner, and working with employees to generate needed paperwork or entries. They also create reports that you can use to make financial decisions.
What Does an Accountant Do?
Accountants are focused on problem-solving and the big picture. They determine how particular issues or transactions should be handled in accordance with established accounting best practices. An accountant is not as much "on the ground" as a bookkeeper, rarely doing daily entries for clients. Instead, they are focused on ensuring that there's no fraud or abuse, that your business is following good practices, and that you have the reports needed to make big decisions.
What Do You Need?
Now that you understand some of the differences between them, what do you need for your company — an accountant or a bookkeeper? If you, a family member, or an employee is comfortable managing daily entries and you're looking forward to the next step, then you may be able to skip the step of hiring a separate bookkeeper. In this case, you do well to have an accountant who can oversee the books and make sure you're doing things well and getting what you need from the software.
If, on the other hand, you find that you rarely have time to enter receipts, reconcile bank accounts, or track down expenses, you probably need immediate help in doing daily tasks. With that in mind, you may want to resolve this issue with a regular bookkeeper before moving on to a higher-level accountant.
No matter what level of accounting service you need, hiring professional help will undoubtedly help your business grow and thrive for years to come.