Accurately recording financial transactions is the heart of a business but do you need an accountant or a bookkeeper to help you do this? That’s a reasonable question because they both perform similar functions. Clearly an accountant can perform the work of a bookkeeper but the reverse is not necessarily true, depending on the tasks required of the employee. If what you need is someone to perform the day-to-day functions of billing, payables, payroll, and receivables then a bookkeeper is probably sufficient, but if you need someone to do financial reporting and analyses then an accountant may be the way to go.
What Does a Bookkeeper Do?
To a large extent what a bookkeeper does depends on the organization. Some businesses have their bookkeepers get the financial transactions into the general ledger accurately. In smaller firms the bookkeeper may be responsible for the entire accounting process and could respond accounts payable, receivables, and payroll. Larger firms typically have these duties separated.
So What Is Left for an Accountant?
There is plenty left for an accountant to do. Recording transactions, billing and balancing the books aren’t the only accounting functions a business needs. The accountant will take the transactions the bookkeeper has entered and from these will make necessary adjustments, create analytical reports for management, will help budget for capital improvements and daily operations and will also handle the required financial reporting to the government.
How Do I Decide What I Need?
What you need depends on the complexity of your organization. If you have a large inventory or a lot of fixed assets your complexity increases. The number of employees you have also increases your complexity due to government regulations that apply to firms based on the size of their workforce. If you live in or near Dallas, Texas, Marlandale can help. We offer a wide variety of services for businesses. We can help you determine whether an accountant or bookkeeper is best for you. And remember, which you choose also affects your operating budget.
What Are the Cost Factors?
Bookkeepers are less expensive than accountants. Accountants typically have more schooling than bookkeepers and may be certified as CPAs. Bookkeepers can also be certified, but the certification does not require the same level of education. You may also consider hiring a bookkeeper for your day-to-day financial needs and then have an accountant look over the books on a quarterly basis, perform analyses and handle any reporting that needs to be performed. This arrangement is used by many small businesses to keep down costs, but ensure compliance with various reporting requirements. Accountants are well versed in the reporting requirements and other requirements related to government regulations such as wage and health care laws. These are the areas where the accountant earns their keep.
How Do I Know if The Person Is Qualified?
One easy way to find a qualified bookkeeper or accountant is to have one referred to you, but that isn’t always possible. What you should require is references that you actually verify, their certifications, proof of their education and definitely check out their work history. Though it may sound impressive to hear someone rattle off accounting terms and processes in an interview, what you want in addition to a knowledgeable person, is one who can explain your financial situation to you in plain English. Accounting terms are meaningless to most people who are not accountants and if your bookkeeper or accountant can’t break down the jargon for you, you will still be in the dark.
What If My Needs Change?
If your needs change because you expanded your operations, added products or services or otherwise changed the complexity of your organization, you should review your requirements for accounting personnel. When you are a small business a bookkeeper is usually sufficient. But if you change the complexity by opening your brick and mortar store to one that has an online presence as well, or if you begin taking online payments as well as in store payments, you may want to sit down with your bookkeeper and discuss their role. Though an accountant wouldn’t replace a bookkeeper the added burden of credit card requirements and third party processors may overwhelm your current staff. The accounting is different and the reporting is also different. Your bookkeeper may even recommend either hiring an accountant full time or having the review the books more frequently than they do. If you aren’t sure what direction to go and you’re in the Carrollton, Texas or surrounding area, call Marlandale. They can review your business requirements, advise you of the implications of your new line of business and recommend the services you should add.