Accountant or Bookkeeper: Which One Does Your Business Need?
One of the challenges small businesses face is keeping up with administrative tasks. Since a small company doesn’t have many staffers, many of its employees do double duty, taking on roles beyond their job description. While this is a good strategy in the short term, it could restrict your business’ growth.
Prevent burnout among employees and foster efficiency by reducing in-house bookkeeping duties. It’s more cost-effective to hire a bookkeeper or business accountant to handle your financial records instead of hiring another employee full-time. However, do you know whether to hire an accountant or a bookkeeper? What’s the difference? Keep reading to learn more.
What Do Bookkeepers Handle?
A bookkeeper records a business’ financial transactions. All sales, purchases, receipts, and payments that have to do with the business are recorded in a company’s books. At times, this contractor can also provide payroll and superannuation processing, data entry, BAS and IAS preparation and lodgment, and producing reports on accounts payable and receivable.
What Do Accountants Handle?
Accounting covers the auditing and maintenance of a company’s financial transactions. You should get an accountant for cash flow projections, reports on taxable income and deductions, business transactions, and other general financial statements.
Accountants also offer other business support services like payroll, risk management, bookkeeping, tax return preparation and lodgment, and BAS and IAS preparation and lodgment. They might also offer strategic or financial planning, benchmarking, budgeting, management through cloud-based accounting software, and tax advice. All accountants can provide bookkeeping services, but not all bookkeepers are accountants.
Which Contractor Should I Get?
Though some areas of accounting and bookkeeping overlap, it is clear that these are separate fields of expertise. Bookkeepers usually handle essential functions like recording and categorising transactions. Meanwhile, business accountants analyse bookkeeping data and devise strategies that businesses can use to increase their profit margins.
Your business will grow if you hire both accountants and bookkeepers. However, you need to consider your company’s size as well. Your financial records’ complexity also plays a part in who you hire—if you have a small startup, you might only need bookkeeping services. However, if you have plenty of staff, the expertise and strategic thinking that accountants provide will help your business scale.
If you’re asking questions about your profit—where it is, how you can grow it, and how much your business is worth—you should hire an accountant. Accountants can give you financial management advice that bookkeepers cannot provide. If your concerns are more about keeping track of purchase orders and receipts, payroll for your employees, and other daily financial functions, it’s better to hire a bookkeeper at the moment. You can always get an accountant when you’ve established your company’s cash flow.
When you’re growing a small business, you have plenty of hats to wear. A business owner must do everything, from dealing with customers or clients to managing the staff, marketing products and services, and even keeping the books up-to-date. Hiring a contractor for your bookkeeping and compliance will save you plenty of time and resources in the long run—it will let you focus on what you do best, which is running and growing a business.
Let New Wave’s team of Gold Coast small business accountants handle your books and compliance. Our end-to-end, custom solutions will help you build a healthy, profitable, and forward-looking business. Book a free strategy session to learn how you can scale today!