Running a business successfully requires great financials and being able to pass that over to an expert can take a lot of pressure off. Working with a bookkeeper or an accountant could give you more control and insight into your numbers and help you to optimise your cash flow. However, which one do you choose?
What’s the difference?
While both a bookkeeper and an accountant handle your numbers their roles are very different. A bookkeeper will usually take responsibility for the day-to-day recording of financial transactions and handling basic financial processes. An accountant, on the other hand, does more analysis and provides financial advice on the basis of that analysis.
The role of the bookkeeper
Bookkeepers can be crucial to the smooth daily running of your businesses. A bookkeeper role could include:
- Handling payroll
- Processing transactions, receipts and payments
- Managing what you owe and what is owed to you
- Reconciling accounts
- Reviewing existing accounting systems
- Monitoring late payments
- Preparing and sending invoices
The role of the accountant
Although most accountants can assist with all of the above, higher fees mean that they are often better used in the more analytical and strategic financial areas, including:
- Creating and maintaining financial statements
- Calculating estimated taxes
- Preparing tax documents and tax planning advice
- Long-term business financial strategy advice
- Cash flow projections and forecasting
- Creating a budget and tracking it against actual performance
- Ensuring that financial and tax compliance issues are dealt with
Which is best for your business?
A bookkeeper is essential for ensuring that you have a bedrock of solid financial and accounts management and that your day-to-day processing and transactions are running smoothly. However, bookkeepers don’t have the experience or insight to input into forecasting, projections, strategy or more complex issues such as compliance and tax planning. So, there is a strong argument that – when it comes to the financial side of your business – you actually need both a bookkeeper and an accountant.
By hiring an accountancy to handle all your financials from bookkeeping to strategy advice, many businesses do find a saving in accountant’s fees at the year end, as your internal financial processes will be so well organised and optimised.
An accountant can also provide the kind of insight that makes a business more efficient and drives growth. Together, the combination will ensure that you have perspective on both your current financial situation, as well as where the business is going – and, crucially, you’ll also have the focus and the tools to get you there too.