OK, I have come to the realization that I am an anomaly. During my senior year in high school, I made the decision that I was going to have a career in accounting. I felt like that was my destiny, because I loved everything about numbers and math was my absolute favorite subject. It all adds up, right? At least for me it did. This was the humble foundation of what grew to be a deep passion for the world of accounting!
It turns out that most people don’t find accounting very interesting. A lot of small business owners would agree that it’s their least favorite part of running a small business. They spend hours on end reconciling their accounts, trying to find an error, or just staring at their financials, which usually ends in having no better understanding than before the process started. Does this sound like you? That’s where accountants and bookkeepers come in. They can lighten the load concerning your business finances which leaves you more time to focus on growing the business.
What's the difference between an Accountant and Bookkeeper?
Well, bookkeeping is the first step in the accounting process. Bookkeepers can take away the day-to-day recording of receipts and invoices and bring the accounts up to a high standard of detail and accuracy. They focus on the recording of financial transactions, with less focus on the analysis. Accountants on the other hand, build on the information provided by the bookkeeper. They focus on the bigger financial picture. Accountants further analyze, interpret, and report the information contained in the financial records. Generally, medium to large-sized businesses have at least one trained accountant who sets up the procedures that are then followed by the bookkeepers.
It’s also important to understand the kind of credentials accountants and bookkeepers have in order to determine how or when to use each. Bookkeepers are administrative professionals who usually have an associate’s degree or two to four years of experience. Their work is overseen by an accountant, or the owner. An accountant is a more specialized financial professional who can handle higher level financial structuring and analysis for a business. Accountants must have a bachelor’s degree in accounting with specialized training.
Which one should I hire?
Bookkeeping and accounting are both important parts of managing your finances. Although the two may seem similar, they differ in how businesses use them. It is often said that bookkeepers are a dime a dozen, but a good accountant will save you more than the cost. A good bookkeeper will lay solid foundations for accountants to analyze data without manual adjustment. Whereas, accountants help bookkeepers sort out tricky transactions, analyze financial data, and measuring business performance.
Accountants can usually handle the bookkeeping for small businesses, but in a medium-large size company a bookkeeper tends to hand off all accounting tasking to a qualified accountant. Cloud technology has streamlined accounting processes which makes having an accountant more affordable. The one you ultimately choose is up to you.