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Do You Need a Bookkeeper or an Accountant?

April 16, 2014 by Ed Becker

For any successful small business owner having someone help with the financial recoding and reports is necessary at some point. Knowing what your needs are and the difference between a bookkeeper and accountant can help you choose which one you need now. It can also help you plan for the future when your business may need both.

Many small business owners do most, if not all, of their own financial recording. With  easily available software it usually is easy to input data and run reports. But at what cost? If you are spending your time with finances what else is suffering? Business owners with some financial background may think they are saving the expense of another employee when, in fact, it could end up costing more in the long run.

Do You Need a Bookkeeper or an Accountant?Knowing whether you need a bookkeeper or an accountant will depend on where you are in your business and what your immediate needs are. Most of the time you really do need both. It’s like hiring a carpenter and an architect when building a house; one sees the big picture and helps you shape and create it, the other does the daily work to make it all happen.

A bookkeeper takes care of the tedious daily receipts and recording of financial data. They will run your monthly reports and ensure that the monies coming in are recorded properly. They can also make sure that your bills and invoices are paid out on time and recorded to the correct accounts. Having a bookkeeper frees up the owner’s time to do what they need to do to grow their business. Keeping your books in order helps alleviate tax time stress. Having the books up to date allows you to analyze trends that can help you make great business decisions. And God forbid if your business ever gets audited. Having accurate and up to date bookkeeping will save you much grief.

An accountant does not spend their time with the daily tasks of a bookkeeper. They look at the bigger picture of where your business stands financially at any point. They will analyze trends and help you make wise financial decisions. An accountant can help prepare reports when and if you choose to secure lines of credit, want to make large purchases, and for tax preparation. They will analyze historical data and offer predictions for future trends and growth.

A bookkeeper for a small business can usually be a part time employee or even independently contracted for part time hours, at least at first. An account is most often not a full time employee for a small business. During tax season they may work full time hours, but the rest of the year they are more of an Advisor or outsourced CFO.
Review your needs and make an informed decision about what you need right now to get your books in order. In the long run you may find that your choice has saved you not only precious time but money as well.

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