For many business owners, especially start-up, small and medium sized businesses; it can be confusing as to whether they need an accountant or a bookkeeper. To most people, bookkeeping and accounting seems like very similar professions.
If you haven’t studied accounting or bookkeeping, it’s hard to tell which functions fall to a bookkeeper and which tasks are within the functions of an accountant. Well, in this article, we will do our best to explain how these two professions differ from the other.
A bookkeeper is someone who handles the recording of financial transactions on a daily basis. These transactions include purchases (accounts payable) , receipts (accounts receivable) , , processing wages, making sure your super is paid on time. Bookkeepers can help track a business’ entries, debits and credits and provide management reporting at short notice
Typically, businesses should hire bookkeepers in order to generate information about their business’ activities. These days, bookkeepers utilise computer software such as Quickbooks, MYOB and Xero in order to track an organisation’s activity. Such software has, however, automated many of these recording processes. Thus bookkeepers are able to summarise and provide better classifications for financial report data.
An accountant has a different function from a bookkeeper. Basically, businesses hire accountants in order to verify financial information submitted by a bookkeeper. They are primarily responsible for generating reports and performing audits. They are also responsible for preparing financial reporting records such as balance sheets, income statements and tax returns.
Accountants can also get an insight on a company’s financial health and create a report that’s easier for business owners to understand. These professionals can even provide information for business trends, forecasts, as well as opportunities for growth.
Accountant or Bookkeeper?
Many businesses would rather hire an accountant or a bookkeeper. And while an accountant can generally perform the functions of a bookkeeper, they usually have higher rates. A lot of these businesses, unfortunately, think that they are saving money, where in fact, they the accountant higher than what they would pay for a bookkeeping expert. So, it is highly recommended to have different individuals taking on these two positions.
If you’d like to know more about bookkeeping questions, please talk to us. ACT Bookkeeping Group is a trusted bookkeeping company in Australian Capital Territory for many years. Our bookkeepers know how vital it is for small and medium sized businesses to get professional advice. Talk to us now and we’ll see how we can help your business grow through proper bookkeeping!
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