Hello to all my fellow entrepreneurs!! It’s me again, Erica Fields, your money motivator and your growth instigator bringing you the keys to your financial house!! I hope your past week was abundantly blessed and that today begins another week of prosperity!!
Today’s topic is about the difference between a bookkeeper and an accountant. Depending on where you live, your state’s CPA licensing board will “own”, a term I use lightly, the term accountant and even with a degree in the accounting field, without a certification, you cannot present yourself as an “accountant”, nor can you state that you provide “accounting services”.
My Two Cents
Now, I feel there is a gray area. For instance, I live in Texas where the Texas State Board of Public Accountancy will send you letters and emails if you have any content related to your online profile with the based word “account” in it. They hunt you down like you stole a piece of their stock and request you expeditiously remove those words and send them written confirmation that you have done so. Yeah…
My position is, my 20 years of accounting experience working for GLOBAL organizations that legally reported me to the Texas Workforce Commission as holding titles including “accountant” or providing internal support in the “accounting” department. Not once did the TSBPA contact me when employed by such establishments to ask me to change my online professional profiles or remove it from my resume, application details or other areas where I chose to advertise my expertise.
It was not until I chose to launch Providence Bookkeeping & Tax Services LLC that I began to receive such fan mail. They sent me letters requesting I remove the titles and experiences from my QuickBooks Online Provide Advisor page and from my LinkedIn profile, both of which existed long before I left my last job employed with a global firm.
So anyway, enough about me. Here is what you need to know about the differences between a bookkeeping and accountant, and how you should choose a best option for your business.
Bookkeeper versus Accountant - What They Can Do for You
Now that you have take the leap, the launch of your business is behind you and things are moving at a pace not predictable by most. Many entrepreneurs begin to feel pressures of leadership and growth and will, at first, take on the task of keeping their own records. They often feel that bookkeeping software will be all the help they need to keep their business on the right track. Does this sound like you?
Here's a piece of advice. The extra time that you’ll spend tracking and understanding your company’s records can easily pull your attention away from the areas of business that need you most. Your role is to set the precedence for your company’s operation, not to wear the many hats. Andrew Carnegie said, “No man will make a great leader who wants to do it all himself or get all the credit for doing it.” And he’s right.
A financial professional, such as a bookkeeper or accountant, makes sure that your business is earning money as efficiently as possible. They manage more than daily transactions but also can provide guidance is areas more behind the scenes than debits and credit. Now, the questions is … which one is right for you?
An accountant analyzes a company’s financial data, including its sales, purchases, payments and receipts through processes known as auditing. These individuals use the data to prepare financial records, predict business trends, forecast the opportunity for growth and manage unnecessary spending. They handle many of the “big picture” aspects of a company’s finances, rather than day-to-day operations, and are best employed for annual tasks.
For most small businesses, it isn’t necessary to hire an accountant. A small business typically doesn’t have enough work to keep an accountant busy or enough revenue to afford the cost of employing an accounting to provide bookkeeping services. Until they have more than 50 employees, a bookkeeper with payroll and tax solutions can be just the financial partner you need.
A bookkeeper records and organizes the financial data based on best practices. This means tracking all profits and expenditures precisely to create an accurate, complete record. They follow the rules, or internal controls, laid out by the accounting standards to minimize errors and as a deterrent to theft or embezzlement.
While bookkeeping software makes it possible for an entrepreneur to track their own records, hiring an outside bookkeeper can free up time and keep your books accurate. All the data that bookkeepers collect is vital - not only for annual reporting, but also to the day-to-day operation of a business. Further, when you find a bookkeeper who has experience working in accounting roles within corporate setting, you get the best of both worlds without paying the price for two services.