What Bookkeeping & Accounting Actually Mean & How They Serve Your Business
One of the most common questions we hear is ‘What is the difference between an accountant and a bookkeeper?‘.
There’s a lot of confusion between the two, so don’t feel embarrassed if you aren’t completely sure yourself. As they say, you’re not alone.
Below you’ll find what separates them in their focus, their duties and the results of both.
Keep in mind that, unlike a lot of Bookkeepers, Business Growth Solutions, when needed, goes beyond the common, expected services we outline below – into proven business strategy & optimization.
BOOKKEEPING – WHAT DOES IT DO?
You can sum up much of what the bookkeeper does by just stating that they keep the financial records and transactions of your business.
It’s a matter of tracking the daily income and expenses of the company, similar to monitoring the health of a person.
Is there more money coming in than going out? Then you’re in good shape. Or is it the other way around?
You need to know if you’re experiencing a temporary setback or if you’ve got a serious, business-threatening condition.
The bookkeeper can tell you the answer and where exactly the problem is.
COMMON BOOKKEEPER SERVICES & TASKS
That’s the broad overview. Here’s some of the work you can, and should, generally expect from your bookkeeper:
They record:
- Invoices being sent to your customers
- Invoices you receive from your suppliers or anyone else you owe
- Payments received from customers (Receipts)
- Payments made to suppliers and others
- Any changes in your inventory
In addition, they can:
- Process your payroll
- Produce invoices
- Post Debits/Credits on daily basis
- Reconcile accounts
- Balance the books
- Prepare financial statements
Again, this is a general overview, but those are the primary tasks you can expect.
The one possible exception is the financial statements preparation, which some do not do or sometimes the business has the accountant do.
Speaking of the accountant, what do they do exactly?
ACCOUNTING – MORE THAN JUST TAX FILING
Accounting tends to take off where the Bookkeeping ends, meaning they process that data for in-house or taxation purposes. So your accountant will:
- Complete your company’s tax returns
- Perform tax planning
- Audit accounts
- Create a budget
- Create the general ledgers as well as record keeping and archiving systems
- Guide you in your business establishment
- Forecast possible impacts of your financial decisions
Where bookkeepers’ territory often ends on the daily financial ins and outs, the accountant makes decisions and gives advice on your fiscal performance.
This not a hard and fast rule, however.
Business Growth Solutions’ expertise can go beyond the basic bookkeeping, if needed, to guide you on improving and optimizing your business performance in Hawaii or anywhere else – raising your profits and profit margin.
Still, this article is a solid summing up of where the line(s) is drawn between the bookkeeper and the accountant.
Financials are a complex and often intimidating world for anyone. Hopefully we’ve helped to make it a little less so for you.
GET YOUR BOOKS & YOUR BUSINESS IN ORDER NOW
Contact us today if you need bookkeeping services or have questions that need answering about what we can do for your business in Hawaii or anywhere else. We’d be happy to talk with you.
