In all our years practice, we have discovered that many business owners do not know the difference between a bookkeeper and an accountant.
Responsible for recording transactions of all monies going in and out of a business. They are trained to understand your trial balance, balance sheet and most importantly your profit and loss statement.
Bookkeepers do payroll, payroll and sales tax returns, pay bills and make deposits. They are involved in the actual running of a business. They can answer questions for the owners, their accountants and of course the dreaded tax auditors. Bookkeepers understand how all accounting functions relate, and hand over to the accountant a balanced set of books.
Take the balanced set of books and analyze the numbers, to guide the business owner towards a successful operation. With good numbers the accountant can make intelligent decisions that will enable a business to become more successful.
A bookkeeper records the numbers, the accountant analyzes the numbers.
In short, the bookkeeper records and classifies the financial transactions of the company, the accountant takes the next steps and analyzes, reviews, reports, and interprets financial information for the company.
As a business owner you should also keep in mind that bookkeepers are not required to have a degree, where the accountant has a degree plus continuing education. Reasonably so, bookkeepers would be less expensive than an accountant. With software these days, your bookkeepers can provide information formally needed for the expensive accountant.
Knowing the defined difference, our hope is that those of you already in business or those thinking about starting a business will think about hiring a bookkeeper on a weekly or monthly basis (depending on your needs) and consult your accountant as the need arises.