Blog

Bookkeeping vs. Accounting Services

No Comments

What is the difference between a bookkeeper and an accountant?

There is sometimes a misconception that accounting services = bookkeeping services. You might think “Why do I need an accountant if I have a bookkeeper?” While bookkeeping can be a part of accounting services, it does in fact differ and the two roles support different stages of the accounting process. In short, a bookkeeper records and classifies financial transactions, while an accountant takes the next steps to analyze, review, and interpret financial information for the business.

Whether you are just starting out as a shop owner, or have been in business for years, it’s important to have the correct financial support. A bookkeeper can work for an accountant or for your shop. Bookkeeping involves the record-keeping of day-to-day financial operations including business transactions and reconciliations, credit card activity, loans, purchases, etc.  Many small business owners can tackle the bookkeeping on their own, and perhaps hire a bookkeeper as they grow.  A bookkeeper does not require a license or special certifications. (Though there are certifications available for bookkeeping if someone wishes to obtain them.)

But a bookkeeper’s job, mainly that of recording transactions properly as it relates to a shop’s income and expenses, is important. That’s because the interpretation of those numbers will influence the owner’s and accountant’s financial decisions. Bookkeeping is focused on accurate record-keeping, not data interpretation or analytics.

That’s where an accountant comes in. An accountant manages the overall big financial picture of the business. They provide financial advice and insight based on information provided by the bookkeeper. It is their expertise and high-level education that will help manage the shop financials and profitability.

Quarterly or monthly meetings with your accountant is recommended, and can help shop owners be proactive in making important decisions regarding finances. Only talking with an accountant once per year is a mistake. You wouldn’t be able to do any planning to overcome any potential pitfalls. With the support and knowledge of an accountant, a shop owner is guided to make the right decisions to promote financial stability and growth.

 

 

 

keyboard_arrow_up

Accessibility Toolbar