Is your bookkeeping becoming too much to handle or you are unsure if you are properly recording all of your records? You may be looking for someone to help you take on the burden of your business’s bookkeeping but are unsure which professional should you hire, a bookkeeper or an accountant. Both professionals will share a common goal, however, there are a number of differences in the role of a bookkeeper versus an accountant as well as the difference between hiring both professionals or getting all the services in one place.
A bookkeeper is a professional that is responsible for recording and classifying your company’s daily financial transactions that will include sales, payroll, payment of bills, etc. In this process they will look over your bank statements, receipts, and other forms of documentation to review each transaction and make sure they are placed in the correct categories. The focus of the bookkeeper is to ensure that your records are accurate and up-to-date, with all of the databases, spreadsheets, and accounting systems have the correct data and are placed in the correct accounts to ensure that all of the bills are paid and the proper reports can be pulled.
An accountant is one who has a 4-year degree and in cases with CPA’s who will have a 5-year degree in accounting and usually a master’s degree in Taxation or some other area of accounting. Accountants and CPA’s will have a higher level of expertise and experience compared to bookkeepers and are responsible for overseeing and checking the work of the bookkeeper. An accountant will take the financial records the bookkeeper had organized and will analyze and interpret the data where they then will compile it into reports or financial statements. Accountants are crucial in helping you to make decisions in your business that you are unsure of, they are there to help guide you through critical business decisions.
You know realize that your business will need both professionals in order to properly operate and successfully last, but do you go with hiring both or choosing a firm that does all in one? If you choose to hire a separate bookkeeper from your accountant and they are an onsite bookkeeper you can expect to pay the national average of between $30,000 to $40,000 depending on where you live while an off-site bookkeeper can cost you anywhere between $60,000 to $80,000 per year at $30 to $40 per hour. The other down side to having your bookkeeper separate from your accountant is that your accountant will not be overseeing your bookkeeper’s work year-round; this means you would have to make sure they are recording everything properly or your accountant will have to fix everything at the end of the year, which can become quite costly.
If decide to choose an accounting firm that will also manage your bookkeeping work than you will usually have more of an advantage over those who don’t. Not only will your business have a bookkeeper that will do all your work, but you will also have an accountant manager that constantly oversees the bookkeepers work to ensure everything is recorded and categized accurately. This also means that you will have an accountant year-round available to track the financial health of your business and provide guidance on making the most profitable decisions for your business. Having your bookkeeping and taxes completed in one place also means you’re at the front of the line for taxes to be done, while you would have to “get in line” when your bookkeeping is handled outside the firm; you may also have to wait on your bookkeeper sending all of the necessary documents to your accountant which can add time to your tax return wait.
Your business will require both professionals, however, it is personal choice on what works best for your business. To many small businesses, it makes the most sense to have their bookkeeping work and taxes for their business done in the same firm for both value reasons and financial. You will not have to worry about spending extra money on hiring two separate professionals and full-service firms will often offer a more affordable pricing option to receive all of your accounting services at one place. Many also enjoy the extra perks of having their bookkeeping and other accounting services in one place such as their accountant being able to provide year-round guidance and receiving more insight into the business’s finances. It is best for you to look over your business and decide financially and strategically which option would work best for you.