As an entrepreneur, you need to be on top of your business all the time, especially with matters related to your finances. Unfortunately, numbers can easily get overwhelming if you’re not an expert, so you need to delegate tasks like tracking your earnings, preparing your tax and organizing your finances to people who know them well: accountants and bookkeepers.
Accounting and bookkeeping services are two very similar methods that people usually mistake one for the other. But while they share a common goal, that is to manage your finances, it’s very important to understand the subtle differences that will allow you to maximize their services in different stages of your financial cycle.
In its essence, a professional bookkeeping service is the practice of monitoring daily transactions consistently to manage a business’ finances more seamlessly. Tasks like producing invoices, recording debits and credits, preparing financial statements and organizing payroll all fall under a bookkeeper’s job. On the other hand, outsourced accounting serviceslooks at the bigger picture and uses financial data gathered by bookkeepers to create financial models and reports that will allow entrepreneurs to make smart financial decisions.
Although accountants and bookkeepers work side by side to stay on top of a business’ financial management, bookkeepers need to pay attention to more minute details while accountants use the information bookkeepers produce to review and analyze financial information.
One of the biggest ways to distinguish accounting from bookkeeping is to take a closer look at the tasks involved between the two to know exactly what makes the one unique from the other:
Since accountants and bookkeepers work in the same area, they sometimes have overlapping tasks that make one familiar of the other’s tasks. But there are differences between the skill set required for each professional.
Before someone can be called an accountant, the individual needs a bachelor’s degree in accounting, although other finance degrees could be considered a substitute. Accountants can also take the Uniform Certified Public Accountant exam and with adequate experience be called a Certified Public Accountant (CPA) and offer CPA services.
In most cases, you don’t need any formal education to offer outsourced bookkeeping services, although a degree or experience in finance would be an advantage for this profession. Individuals can also take online bookkeeping classes to learn the basics of the field. To be a good bookkeeper, you need basic knowledge about financial management, but most importantly, you need to be very critical about the small details because accuracy is a must when you’re keeping track of sales, daily expenses, payments and other financial matters.
Although a bookkeeper and accountant have similar tasks, accountants are the ones who turn all the financial information gathered by the bookkeeper into reports, charts and analysis that business owners use to track their progress and decide wisely when it comes to managing their business finances.
Accounting and bookkeeping services both play crucial roles in helping to keep a business thriving even during the tough times. So, if you’re still doing your books and financial statements by yourself, this is your sign to find the right accountant and bookkeeper to help you manage your finances more wisely. Email us at email@example.com or contact us at 1-844-958-4833.