Your business’ finances are complex, moving pieces and should be handled by a professional, but with so many job titles in the finance sector, how do you know what your business needs? Two of the most common positions in finance are bookkeepers and accountants and although they may seem similar on the surface, they’re actually quite different. Below we’ll take a look at bookkeepers vs. accountants so you can determine what your business needs.
Bookkeepers
Bookkeeping involves the daily recording of every transaction and expense, and the incoming revenue the business generates. Maintaining the general ledger of income and expenses is the largest part of a bookkeepers’ job and it requires daily attention. Of course, most of the time this ledger is kept virtually – whether in a spreadsheet or using a software.
Other tasks bookkeepers are responsible for include the posting of debits and credits, creating invoices, and completing payroll. The complexity of the job is entirely dependent on the size of the business and the amount of business that’s conducted. The size of the company also determines if the bookkeeper will be solely responsible for their tasks, or if the work will be split between several bookkeepers. If it’s the latter, oftentimes there is a team just for payroll, one for invoicing, and one for maintaining expenses.
Accountants
Accountants have a more high-level involvement in a business’ finances and they primarily take the information that the bookkeepers collect and analyze it. Data is analyzed by accountants to determine the financial health of the business, to prepare company financial statements, and decipher any anomalies that need to be addressed. Accountants are also often responsible for the business’ taxes – if not solely, they at least partner with a tax firm.
After accountants make their analyses of the bookkeeping they then have the responsibility to share any findings with stakeholders and help them visualize the larger picture of the business’ finances. Often, functional leaders rely on accounting to help them make strategic business decisions and create financial forecastings to determine the impact of their potential decisions on the financial health of the business.
The Differences Between Bookkeepers and Accountants
To summarize the differences between bookkeepers and accountants, bookkeepers are responsible for chasing down and recording income and expenses, while accountants are responsible for analyzing the information bookkeepers provide. Accounting is a higher-level function that requires a larger understanding of the business’ goals and is involved in strategic decisions surrounding the business’ future. Bookkeeping, on the other hand, is the backbone of a financially healthy business and the accuracy of the data they provide directs the business.
No matter if you need additional bookkeeping or accounting assistance for your business, PAS consulting has highly-trained professionals for the job. Give us a call to discuss the needs of your business today!