As a typical business owner, in addition to having to handle business operations, you are also responsible for ensuring the proper management of your business’s financial data. There are many accounting and bookkeeping software programs that may turn accounting responsibilities into simple tasks that you can take on all by yourself, but it is still time taken away from operating your business.
As your business evolves and your tax planning and accounting duties become more complicated or if you rather someone more experience handle the financial duties, you can get help by hiring a financial professional. Bookkeepers and accountants are a part of two distinct professions and in their own ways, can use their specialized knowledge and skills to allow you to efficiently operate your business.
Cash flow is an essential factor in the efficient operation of a business. Individuals who specialize in providing bookkeeping services can perform the daily financials tasks that can keep track of where your money is going. Bookkeepers can perform duties such as:
- Calculating employees’ withholding or some other payroll service
- Paying bills
- Accurate recording of transactions
The records for these transactions and more may be kept in ledger and also noted on bookkeeping software, such as QuickBooks. All of the information handled by the bookkeeper can allow business owners to make educated decisions regarding their businesses, provided the information is properly analyzed.
Many business owners may see their accountant only once a year for tax preparation, but if you are trying to obtain new lines of credit with a bank, you may need an accountant more regularly. An accountant, who can be a licensed CPA, provides assistance beyond tax preparation services. After verifying the information from your daily financial transactions, he and she can assess your financial standing and act as a chief financial officer, creating customized financial plans to help you reach your business goals. Accountants can also perform other duties, such as conducting audits and generating financial statements that help analyze your financial data.
Who to Hire
If you are struggling to juggle your business duties and bookkeeping tasks or you have no adequate knowledge or interest in bookkeeping procedures, it may be best to outsource these tasks to someone else. Bookkeepers are especially important if your business is growing rapidly and you are acquiring more employees, customers and vendors, all which can mean more financial data and paperwork.
An accountant is a better choice if you require tax services. Having you own tax accountant on staff can help you avoid asking “Where is tax preparation near me?” or “Are there tax services near me?” An accountant is also necessary if you are encountering business issues such as increasing revenue, but steady or lower profits. He or she can provide an objective analysis of your daily transactions and formulate a plan to improve your business.
No matter the size of your business, it is important that someone is keeping track of daily financial transactions and is able to accurately evaluate the information to make the business more efficient. Depending on the specific needs of your business, a bookkeeper and an accountant are the two financial professionals you should consider hiring. When making a decision, keep in mind that the main distinction between the two professionals is how they handle financial data.