Accountants, Bookkeepers and Why You Need Both

Accountants, Bookkeepers and Why You Need Both

A lot of business owners are not sure of the differences between a bookkeeper and an accountant and usually want to know if they should hire an accountant or a bookkeeper. In this article, we are going to be looking at the difference between an accountant and a bookkeeper and why you need both.

Differences Between Bookkeepers and Accountants

Bookkeeper

A bookkeeper is that person who is on a month to month basis balancing your financial statements, they are balancing your checkbook, they are making sure that your receivables are coded correctly, that your expenses are coded correctly and at the end of the month they are giving you a few statements. They are giving you a balance sheet which is kind of the State of the Union right it's what are your current balances in all of your cash accounts and all of your receivables and all of your payables, what is your current equity in your business. They should also be giving you an income statement which shows your income and your expenses and your net profits. The third thing they should give you is a general ledger, the general ledger actually just takes the numbers from those first two reports it is the detail of how those numbers are, and then the fourth thing that they'll give you is a cash flow statement which shows you how cash is actually moving throughout your company it is a very important statement that they should be giving you so that is the bookkeeper.

Accountant

It is usually a more expensive route to let the accountant do your monthly bookkeeping but an Accountant can do that part as well. I like to look at my accountant as my planning partner/ They are the people that I would go to talk about what you know strategically, what are my taxes going to look like, what should I be doing differently to you know change the wave, change the financial outcome of my business. Those kind of things, not necessarily the how am l coming up with more revenue but they are the person that is there to give you some ideas on how you could shift things around or maybe make a certain investment or choose to make an investment later because maybe there is a better tax advantage of it in the future kind of thing. So that is the difference between the an accountant and the bookkeeper

When Should You Have a Bookkeeper or an Accountant?

The fact is if you are not on top of your numbers if you cannot walk up to an accountant and say yes I know my income I know exactly what I've brought into my company, exactly what I've sold, I know what my receivables are, I know what my expenses are and what my net profit or net loss is and you are not waiting to the end of the year to find that out. You know you got to know those numbers so get on it right away, find you a bookkeeper someone that could take care of that you know in QuickBooks or one of those great online programs. You can hire a virtual bookkeeper where everything is done virtually, so no excuses you can find someone anywhere in the country to take care of these things for you the prices vary you know anywhere from as low as $20 an hour up to 85 dollars an hour for a bookkeeper. So you'll see a wide array of bookkeeping prices and you just need to really look at how much time it's going to take them, what your expectations are, what is it that they say they can do and then you need to get a little education on how to read those financial statements. Hopefully they can provide that for you as well. I want to remind you to be very decisive and make these decisions, get that bookkeeper taken care of or that accountant taken care of. Check out http://www.bookkeeperco.com.au for more informations and help.