Accountants are not the only important financial players in your business; bookkeepers can be influential as well. Small business owners are faced with a decision as to whether they should acquire an accountant or a bookkeeper, but the two have different jobs and responsibilities. Let’s take a look:
An accountant tends to focus on:
- Statutory report creation and filing
- Providing business and financial advice
- Counselling on business entity structure
Further, accountants are usually accredited by or are members of a statutory association. Depending on the country of practice, some standard titles are Certified Public Accountants (CPA) or Chartered Accountants (CA).
“While accountants tend to specialise in the financial aspect of a business, a bookkeeper focuses not only on finances.”
While accountants tend to specialise in the financial aspect of a business, a bookkeeper focuses not only on finances, but also on organisation, recording, and reporting as part of the day-to-day business operation. Recently, bookkeepers also work with:
- Client training in accounting software
- Maximising the efficiency of a business by instituting inventory control and document management
- Help expand understanding of daily transactions by implementing POS (point of sale) systems
- Create, execute, and support internal business improvements
Bookkeepers are often highly specialised, and may provide unique qualifications that could be very beneficial to your business; be sure to ask about it when considering hiring!
Specific tasks of bookkeepers
Bookkeepers can act in a variety of ways:
- Tracking transactions: a bookkeeper can be responsible for bank-to-business interactions; bookkeepers can make use of existing accounting software and use this to feed directly into automatic banking. Bookkeepers can keep an eye on cash flow by checking the feeding of bank statements into accounting software, and also saves time on data entry.
- Invoice and account receivable ledger management: bookkeepers often control invoice preparation and sending. They are also often responsible for managing the accounts receivable ledger and minimising the number of late payments.
- Looking over balances and revenues: while accountants tend to watch over long-term financial trends, bookkeepers focus on the day-to-day money. Bookkeepers keep an eye on balance of revenues to expenses and use this information to take action or offer advice if the business is in a less-than-ideal situation
- Account book management: a common job delegated to the bookkeeper is the management of accounts so that they are valid and updated when needed by the accountant. This interaction between bookkeeper and accountant allows the latter to perform their job most efficiently.
Neither the bookkeeper nor the accountant could perform their job effectively without the help of the other, so it is a good idea to acquire both for your business.