Are you ready to spend more time growing your business and less time keeping up with your business? Then it’s time to discuss whether you need a bookkeeper versus an accountant on your team.
“In short the difference between an accountant and a bookkeeper is that the bookkeeper is tasked with recording financial transactions while an accountant analyzes those transactions.” - By Laureen Miles Brunelli
A bookkeeper may or may not have a degree in accounting but has some experience working as a bookkeeper for some company or taken at least a few classes. They’re usually going to know the difference between a debit and a credit and a payable and a receivable. These are the basic building blocks of keeping the books An owner trying keep the books themselves is essentially fulfilling the role of a bookkeeper. The invoices to the customers are easily prepared, thank you Quickbooks, and it’s easy to record when those payments have been received. Bills can be tracked and it’s easy to prepare an aging report to determine who needs to be paid, again, thank you QuickBooks. It is even possible to prepare and maintain payroll, shall I even say thank you again?
An accountant on the other hand will have at least one degree in accounting and definitely some good, solid experience in the field. An accountant will hold themselves out as someone who can take the payables and receivables to the next level and help support the business owner with determine which vendors are more sensitive and need to be prioritized or simply manage the aging history and current cash flow to make sure bills are paid on time. An accountant can help monitor the receivables to determine which customers are reliable and which customers take more time to settle their invoices. And an accountant can look at financial statements and determine reasonability in fluctuations or missing expenses such as rent payments that didn’t get settled up in the current month.
A CPA is like an accountant++. A CPA has taken the time to put in the effort to achieve an accreditation that is monitored annually through ongoing education. A CPA has been trained to monitor financial reports and has the experience to notice trends in month over month or year over year results to see trends in income and expenses. A CPA has the experience to help manage fixed assets and prepaids to ensure an accrual based business is managing their income and expenses correctly. And most importantly, a CPA has the training and education to help manage cash flow, a key factor in a business. A CPA should be able to analyze and build a cash flow forecast that will predict what the incoming receipts are and what the outgoing costs are to help a business owner manage their cash so their receivables and payables are such a surprise when they come in and leave. Some CPAs have specialized training in taxes or auditing or at least enough experience to help prepare a client for their annual taxes and, heaven forbid, prepare them for a tax or public audit.
Hiring on an on-staff or outsourced bookkeeper, accountant or CPA can be a complicated decision that a business owner will need to decide at some point in their growth and is dependent solely on the stage of their business. This is something that I’m more than willing to help support you with as you’re finally ready to spend more time growing your business and less time on the details of keeping your books. How closely you plan on working with your bookkeeper/accountant will determine whether you hire on-staff or go outsourced. And the level of certification you want in the keeping of your books will determine what level of an accountant or a bookkeeper you want to work with. This is a discussion that I will be more than happy to have with you.
The key question you need to ask yourself is are you ready to spend more time growing your business and less time keeping up with your business? And if you are, then it’s time to have a conversation with me to help figure out where you’re at and where you want to go to find out who you need to support your business. Contact me today!