Bookkeeper vs Accountant: What are the differences?
What is a bookkeeper?
Bookkeepers record a business’s financial transactions and operations. This is a daily task, meaning that a bookkeeper includes themselves in the business’s internal operations.
A bookkeeper has to record day-to-day transactions in a consistent manner. By doing so, the bookkeeper will get useful financial records to help with operations and success of a business.
Bookkeepers are not necessarily required to have a license. Many bookkeepers, however, will get a correlating certification. These certifications will provide the bookkeeper with more credibility.
A bookkeeper performs the following tasks:
Maintaining a general ledger
Creating and preparing financial statements
Conducting bank reconciliations
Maintaining a historical document of accounts and subsidiaries
The most important function of a bookkeeper is to maintain a general ledger. In doing so, the bookkeeper is able to record sales and expenses in an organized manner. A general ledger can be come in different forms such as an Excel Spreadsheet or even a piece of paper.
Bookkeeper GuideBookkeepers come in several shapes and sizes, which could make it hard to select the bookkeeper that is right for you. If you are stuck on which bookkeeper to hire, make sure they meet your criteria! Does their bookkeeping system match your accounting system? Bookkeeping services can operate on several different types of software. The five best accounting softwares are QuickBooks Online, Xero, FreshBooks, QuickBooks Self-Employed, and Wave. Other great softwares are Melio, Stripe, Gusto, and Bill.com. It is best to find a bookkeeper who uses your current software or one that would at least be compatible. How much does the bookkeeping cost? Make sure to compare the features and services of each bookkeeper. Price can correlate with the software system that you choose. Does the bookkeeping service match your business’s accounting methods? If you are using the cash-basis method or the accrual-basis method, you will need to find a bookkeeping service that can match your method. Do you need catch-up bookkeeping services? It can be hard to maintain and stay up to date on all financial records. If you need to get up to date in your record-keeping, a catch-up bookkeeping service will help get you on track. These services can cost a monthly fee. Once a day or once a year? Certain bookkeeping services offer their services on a daily to a yearly basis. Based on the relationship and service you need, the timing of the services can be paramount. Make sure to keep these bookkeeper tips in mind for when you need to hire a bookkeeping service!
Advantages of having a bookkeeperThe benefits of having a bookkeeper reveal themselves immediately. By having a bookkeeper to document and archive financial records, your small business can flourish. Having a bookkeeper will allow you to receive detailed recordings that will help you maintain your business accounts. The records created by the bookkeeper provide an easy way to navigate financial statements. Bookkeepers usually have lower service costs than accountants. If you are struggling and need help, a bookkeeping service could be a better option than accounting services. Bookkeeping services create ways for you to track and organize your ledger or financial statements. Having an organized financial record can help you in the future by keeping all your information in order. Bookkeepers offer in-depth balance sheets and reports, which give you the ability to predict your yearly taxes. Through the bookkeeper’s detailed and organized files, you can prepare for and know the number of tax deductions.
What is an accountant?
Accountants analyze the records that bookkeepers create. Once a bookkeeper gathers the required information, the accountant will then draw conclusions on the data given.
Accountants have to receive extra education and can receive certifications. A common practice for accountants is to become a Certified Public Accountant.
Accountants achieve this through CPA exams and certifications. Accountants must have a specific amount of professional experience to get their CPA.
An accountant performs the following duties and tasks:
Analyzing and verifying data
Financial forecasting and business trends
Summarizing business records and financial statements
Reporting financial inclines or declines
An accountant helps with several things. They can be responsible for providing insights and strategies for financial status. Accountants will dive into each aspect of your finances year round.
The best accountants create in-depth summaries of your financial scenario. The summaries will be easy to understand and comprehend.
A large role of an accountant is to prepare and file tax returns. With the help of an accountant, you will decrease your tax liability and how much you might pay in taxes. The accountant will also ensure that all tax information is correct and will provide updates to changes made along the way.
Accountant GuideSimilar to bookkeepers, accountants offer several different services. To make sure that you are receiving services that are a fit for your company, compare several accountants. Ask for their Preparer Tax Identification Number. Having a PTIN is required by the IRS. Accountants who file federal tax returns for compensation must have a PTIN. But, other accountants who do not assist or prepare tax returns for compensation do not need one. Require a law license or a CPA. Make sure that an accountant has their law license or a PTIN. In doing so, you can assure that they are willing to take an extra step and go further for you when you need them. Accountants need to take several exams to assure they are worthy of these licenses. Take note of price. Each accountant is going to charge a different rate based on the services they provide. Make sure to compare the cost of each accountant’s services that best align with your needs. Look for memberships. If an accountant belongs to the National Association of Tax Professionals, the American Institute of Certified Public Accountants, or any other professional organization, they have good practices and ethics. It is important to note that an accountant will back you in a time of need. If the IRS calls you into an audit, you want your accountant to be there. The best accountants will stand by your side when you need them the most! These accountant tips will ensure that you can work with the best accountant for you!
Advantages of having a accountant
Accountants are experts who attend and go through more school to gain certifications. An accountant’s services can make a large difference for every small business. By offering help on wide variety of services, they will guide you towards better finances.
Having an accountant help you during tax season can save you time and resources. Having a professional do your taxes is a smart thing to do. Accountants will use their experience and education to file taxes and analyze necessary items.
An accountant will provide an up-to-date and comprehensive overview of your financial well-being. An accountant will also provide recommendations and strategies that are best suited for you.
Accountants can also help cut tax penalties, legal issues that may arise, and tax liability. Accountants can help compile financial evidence to help you in a legal issue if their help is needed. Accountants make sure to account for every number and not let a single-digit fall out of place, which ensures your safety from tax penalties.