Many business owners don’t fully understand the distinction between accounting and bookkeeping, but it’s vital to know they’re not the same thing. And this matters because in order to understand whether your business needs an accountant or a bookkeeper, you need to know what the difference is between the two.
We’re going to take a look at what it means to balance your finances effectively and how you can make a decision between choosing an accountant and a bookkeeper. So read on to find out more.
Managing Your Business Finances
Early mistakes that your business makes in the realm of financial planning and organization can linger over the company for a long time afterwards. Long-term reporting issues have long consequences and bad processes can be hard to change once they’ve been established.
Nevertheless, it’s vital to ensure your business does everything it can to manage its finances in a healthy and sustainable way. Failing to do so will lead to problems later on, but it’s hard to get it right if you don’t have the right professionals in place taking care of the accounts. And that leads us onto our next area of discussion.
What’s the Difference Between an Account and a Bookkeeper?
As we’ve established, there are important differences between an accountant and a bookkeeper. It’s important to understand these differences if you’re going to make the right next move. A bookkeeper is someone your business hires to come on board and manage the books and the data they contain. They have to stay on top of the business’s transactions, keep records up to date and track expenses and income. A bookkeeper will also take care of routine tasks such as invoicing and payroll.
For many small businesses, accountants take care of many of the duties usually taken care of by bookkeepers. But it’s usually the case that accountants oversee the bookkeepers and track their work. There’s also a range of other tasks that usually fall under the purview of the accountant, such as billing, reviewing accounts payable activity and ledger entries. They also usually prepare for taxes, manage cash flow and generally oversee the financial health of the business.
So Which Option is Best for You?
If you’re looking to completely reconfigure the way in which your business’s financial systems are managed, it might be a good idea to put an entirely new team in place. When you do this, it’ll more than likely include a bookkeeper and an account that oversees them as their senior within the accounting department.
If you’re looking for someone to work alongside an accountant or account service that you already have in place, it might be better for you to look for a new bookkeeper or a bookkeeping service, depending on your priorities and what you’re looking to achieve.
Hiring an In-House Team
There are costs and benefits associated with hiring someone to come into your team from the outside. Hiring a new person means being able to oversee their work directly in the office, but it’s often a much more costly approach than the alternatives, and it tends to be a less efficient option too.
Hiring people is time-consuming and costly, whereas using outsourced services can enable your business to outsource your bookkeeping or accounting needs to a whole team of qualified professionals at a much lower cost. If you don’t feel as if your business is currently in a position where it would be wise to add a new member of staff to your team, this is certainly something to take into account.
Using Professional Training Services
If you have a team in place but you simply want to improve or upgrade their bookkeeping skills, we can help to make that happen. Offering them new skills via carefully crafted training courses is a great way to ensure your business’s approach to bookkeeping is the right one without having to spend a huge sum of money.
With those extra skills and talents, your team will be able to reduce the amount of accounting and bookkeeping mistakes that are made and ensure your business is in a position to successfully deal with all of the financial challenges that arise.
If you think your business would benefit from a professional bookkeeping training service, you shouldn’t hesitate to get in touch with our team at The Bookkeeper Hub. We’ll help you to start taking back control and get your small business’s finances where you want them to be going forward.