Regardless of the type of industry, you work with or your business’ legal structure, accounting, and bookkeeping professionals are essential to the current status of your company. While both of these terms are often utilized interchangeably, there’s a huge difference between bookkeepers and accountants. When it comes to their roles and responsibilities, these two are different from each other in terms of leveraging managing your business’ financial data.
Synergistic Relationship between Bookkeeping and Accounting
Based on their names, bookkeepers means to “keep” or manage all of your company’s financial records, while accountants, means “account” – explain or analyze what is written inside the record.
As a result, bookkeepers and accountants are partnered to make sure that the company’s finances are not only accurate, organized, updated, and compliant, but also they are being utilized to upgrade your current business performance.
Bookkeepers are needed to be knowledgeable in basic accounting. They are crucial to recording the daily and monthly financial activities that are happening within your organization, such as:
- Accounts payable and receivable
- Financial statements
- Cash flow
Working with a reliable and professional accountant is a good move when you need someone who can help with transforming and analyzing your company’s financial records into:
- Accurate and optimized tax returns
- Financial forecasts, budgets, and projections
- Informed business plans and decisions.
Below is an overview of how you can make the most out of these two services: bookkeeping and accounting. Indeed, they can enhance your business processes while allowing you to focus on your goals.
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Reasons Why Every Business Needs Bookkeeping Services
In any business, your potential to thrive and develop leans dependently on keeping a well-maintained and organized a set of your company’s financial records. In fact, the more organized and well-established your approach to the bookkeeping process, the easier it will become to advertise and monitor your business’ growth.
Because a bookkeeper’s duties revolve mainly on recording and reporting a business’ financial transactions, also, they established the foundation of financials for better accounting analyzation. That kind of analyzation enables business owners to create a wise and impactful decision when it comes to business direction.
Here is the list of duties an outsourced bookkeeper is often doing:
- Verify and record cost receipts and employee expenses reports
- Record client payments and issue receipts
- Receive, pay, and enter supplier invoices
- Processing your business’ accounts receivable and accounts payable
- Generate reports and your business’ financial statements that include balance sheets, income, and cash flow statements
- Generate customer account statements and invoices
- Calculate and remit payroll deductions
- Perform credit and bank account reconciliations
- Process direct deposit transfers and check payments.
Reasons Why You Need Accounting Services for Your Business
The work that bookkeepers have completed are being reviewed or performed under the supervision of a CPA (Chartered Professional Accountant). Though many small companies tend to hire a full-time accountant either affordable or necessary, there are particular events and growth phases that need to be assessed by a CPA – temporarily.
Your company should consider hiring a CPA if you need to do the following:
- Closing out your year-end accounts
- Engage in financial planning, cost and revenue management, and performance analysis
- Your financial records were independently audited, especially if your business is a not-for-profit organization, public, or if you’re planning to sell your business
- Complete annual tax returns and takes full advantage of relevant tax credits, exemptions, and deductions.
Many CPAs perform duties that revolve around verifying the accuracy of financial data and records, reviewing, and interpreting the company’s bookkeeping