Do I need an accountant or a bookkeeper? Do they do the same thing? Don’t they work in competition with each other?
These are questions that we get asked all the time.
To be perfectly honest, accountants love it when you have a bookkeeper. The jobs each profession do are completely different, but do work in synergy with each other.
Bookkeeping is important for any business, regardless of the industry or size. It keeps all of your financial records in top shape, which makes all aspects of your accounting a lot easier.
Let’s take a look at the role of a bookkeeper and the difference they can make to your business.
The Role Of Accountants v. Bookkeepers
Sometimes the roles of accounting and bookkeeping can overlap, or the names may be used interchangeably. But there are some distinct differences between the two. The role of a bookkeeper is to have everything prepared for your accountant when it comes to analysis, auditing, or tax time.
Bookkeeping refers to the recording and maintenance of day-to-day financial transactions. This includes all purchases, sales, payments, and receipts. A bookkeeper often also produces weekly or monthly reports and account reconciliations.
This keeps everything in order for the accountant to come in and take care of data analysis, auditing, and filing tax returns. Having a great bookkeeper who is efficiently managing the day-to-day work makes an accountant’s job easier and saves you money on your accounting fees.
Below are some of the top benefits of having a bookkeeper:
Your bookkeeper can track ingoing and outgoing payments – making sure that you are paying bills on time and your clients are paying you on time. This is important for making sure you have money coming in when it is supposed to, and keeping you out of bad credit with suppliers.
Matching Transactions To Correct Accounts
Businesses often have multiple accounts and things can get messy if they aren’t monitored properly. A bookkeeper can make sure money is put in the right place or quickly remedy it if it isn’t. This can be especially crucial around end-of-year accounts and tax time.
Regular Account Reconciliation
You don’t want to get to the end of the financial year and find out that you will be paying an accountant overtime to correct mistakes in your financials. Regular bookkeeping can ensure your accounts are reconciled on a daily, weekly, or monthly basis depending on how many transactions you have per day.
This means the records will all be correct when the accountant needs them.
Required Reporting Completed
Profit and loss statements or reporting to investors can all be taken care of by your bookkeeper. This means that you can check up on the financial health of your business easily by looking at these records. Also, it is one less thing that your accountant will have to worry about.
Having a dedicated eye on your day-to-day expenses is very important. A bookkeeper will be paying close attention to outgoing costs like company credit cards, company vehicle use, and supply costs. They can also alert you to any red flags in these areas, like sudden increases in costs or suspicious activity with company money.
When it boils down to it, your accountant is not the only one who wins from having a bookkeeper – you benefit too! You will get more time for business operations (and some well deserved time off) by leaving the finances to a professional.
Got the bookkeeper but not the accountant? Or maybe you are looking for a great accountant who can work in with your existing financial team? Then get in touch with us here at Accountants Plus today.