Many people tend to use the terms bookkeeping services and accounting services. It is understandable, especially since accountants like our accountant at AA Tax & Accounting Services offers both bookkeeping and accounting services. However, these services provide small business owners with different benefits.
Bookkeeping Services Keeps Track Of Financial Information
The main benefit of bookkeeping services is the knowledge that your business’ day-to-day financial business is being tracked and recorded. In general, bookkeepers perform data entry work, from entering invoices to balancing the general ledger.
This work is essential to your business, as it means you will have the information you need to accurately:
- File your taxes
- Track accounts payable and accounts receivable
- Detect embezzlement
- Review the general ledger
- Ensure bank reconciliations occur correctly
Along with this necessary work, some bookkeepers also take care of employee payroll processing, as well as creating invoices for your business to ensure vendors pay you in a timely manner.
Accounting Services Helps With The Financial Big Picture
While accounting services can include bookkeeping duties, an accountant will generally help a business take a longer view in regards to their finances. This means that an accountant will take the information recorded by the bookkeeper and use that info to make reports and recommendations.
For instance, say your accountant takes the information around your business’ profits and analyze it against certain expenditures. That way, the accountant can assess what is a profitable expenditure and what areas your business can tighten up costs. Some of the other essential services accountants can provide are:
- Tax preparation for individuals, businesses, and nonprofits
- Startup company planning
- Business consulting
- Entity Restructuring
- Revenue recognition strategies
- Payroll services
Another important distinction to make when it comes to accountants and bookkeepers is the education involved. While some businesses prefer bookkeeper with some secondary education, all a person needs to be a bookkeeper is a high school diploma.
But with accountants, they need to have at least a bachelor’s degree in most states. And if you are looking for an accounting firm to work with, you can easily check their credentials to ensure they are both educated and experienced.
How To Determine Which Service Your Business Needs
In many cases, the size of your business can help you determine which type of accounting service you need. If you only have a couple of employees, a bookkeeper may be all you need to ensure that your company’s finances are in order. With the accurately tracked information, you can bring your records to our accountant to take care of your tax preparation and filing of your return.
As your business grows, bringing an accountant onboard can help ensure that your company is headed in the right direction. Since an accountant’s job is to take the long view when it comes to your business, they can help point out areas where overspending may be taking place as well as sectors where it makes sense to invest further. These recommendations may involve you looking for new vendor bids and investing in online marketing to grow your company’s reach.
Also, there are plenty of times where it makes sense to work with both a bookkeeper and an accountant. As our accountant performs both of these services, you can feel assured that your day-to-day financial business is taken care of and receive reports and recommendations which will help you continue building up your company.
When you have determined what services you need, contact us to start working with our accountant, and see how we can help you make your business grow.