Business owners; be it big or small should make sure that their financial data are current and accurate in order to come up with a good business decision and to guarantee a continuous cash flow. As the business grows bigger and bigger, keeping track of the amount of money that is coming in and out can be quite difficult. Which is why it is important to hire an accountant? Should you go for an accountant or a bookkeeper? Why need a bookkeeper not dominate the market?
Below are the comparisons between a bookkeeper and accountant and why should you choose the latter over the former.
- Accountants and bookkeepers are used interchangeably when in fact; the two terms are different and have a different scope of work. A bookkeeper is the one handling the daily task that involves the recording of financial transactions such as purchases, sales, receipts, and payments.
- The bookkeeper’s work is to generate data about the business’s activity. On the other hand, the accountant turns the data into information.
- The accountant verifies the data, analyses it, and creates reports based on the gathered data. It is also the accountant who prepares the financial reporting record including the balance sheets, income statements, and tax returns.
- The analysis created by the accountant is extremely helpful in various aspects of the business such as the current business trend and growth opportunities.
The role of an accountant and a bookkeeper can be quite confusing but it is a must to distinguish between the two so that you will know which one exactly you need for your business. For big businesses, the role of accountants is a must for they look at the big picture. Some accountants do bookkeeping too but it is impossible for a bookkeeper to fill in the roles played by accountants. If you are a business owner, you should not take for granted the importance of hiring an accountant. It could mean additional business expenditure but they can be a big help to your business. You can focus more on marketing and growing your business while the accountants handle all the technicalities of your business.