When it comes to tracking your business’ income, spending and other financial realities, it can become overwhelming if you are not prepared. To accomplish this daunting task, many business owners and operators begin looking into bookkeepers and accountants. Whether independent, part of a firm or hired on to the business itself– bookkeeping and accounting can be completed in many different ways. The question remains: what’s the difference? Read on for Liu & Associates guide to these two different types of financial services.
What does a bookkeeper do?
Also known as record keeping, bookkeeping includes but is not limited to tracking daily transactions, creating invoices, maintaining payroll and ultimately building a foundation of clear, concise financial records. The scope of bookkeeping depends on the size of your business and you may or may not require dedicated staff to complete these tasks.
What does an accountant do?
Accounting consists of everything a bookkeeper would do, but widens to include more high-level financial advice and analysis. An accountant may complete any of the following objectives: financial impact statement; future projection of performance; tax filing and strategy; operational cost prediction or adjustment; and many others. Essentially, an accountant takes the specific data collected by bookkeeping and produces a more general, bigger picture.
What service is right for me?
This could be a challenging question if your business is in transition, but often you can make a decision based on the size and scope of your endeavours. Often, sole proprietorships and partnerships start out with the individual(s) handling their own bookkeeping services. As small businesses grow, a third party or part-time bookkeeper can be employed– but some may even skip this step and bring on an accountant, especially if the business is growing quicker than expected.
As you can see, the line between accounting and bookkeeping is quite distinct. Often a business owner will know what level of assistance they require on an instinctual level, even before interviewing potential services or employees. If you have any questions or concerns about this issue, contact or visit Liu & Associates today!