Bookkeepers are tasked with recording the financial transactions, while a full-service accountant is responsible for categorizing, reviewing, reporting, and summarizing this information. The initial organization and recording of a business’ transactions like payroll, daily sales, bills paid, and other expenses fall to a bookkeeper.
However, there is no defined line where a bookkeeper’s role should stop and that of the accountant to start. Some accounting processes may require a full-service accountant to indemnify and correlate the records or books presented by a bookkeeper.
What does a Bookkeeper Do?
Bookkeepers make sure that all of the payments, invoices, credits, and debit transactions of a business are recorded on a timely basis. They ensure that your business and bank records match.
Regardless of which method your bookkeeper uses to maintain the records – accounting software, ledger paper, or spreadsheet – they must update your general ledger frequently. Otherwise, you will never know if your business can apply for a business loan, needs more cash, or realizes a profit.
Accurate bookkeeping records are critical when investors, potential buyers, or financial institutions, need to verify your company’s financial history. They cannot invest, buy, or lend unless you can provide proof of creditworthiness via rock-solid bookkeeping records.
Keeping precise records ensures that you can validate business transactions that require supporting documents by the IRS. For example, receipts for meals and entertainment, business travel, expenses, purchases, income, etc. Since a full-service accountant uses these records to help companies make financial decisions, the importance of having a great bookkeeper and efficient bookkeeping system cannot be overstated.
Why is a Full-Service Accountant Better For Your Business?
If you are a small business owner and you think you don’t need an accountant since you have a competent bookkeeper, think again. Accounting is a vital component of every business. It involves analyzing bookkeeping transactions for completeness and accuracy to obtain a crystal-clear financial picture.
Successful business owners rely on their full-service accountant to make recommendations to stay compliant with tax laws and improve their business’s financial health. Accountants know how and where to look for weak areas, like inconsistencies and patterns in finances, and how to rectify them.
For example, a full-service accountant can make suggestions regarding business financing or offer advice on cash flow management. Depending on your needs, they may also play the role of a certified financial planner and aid you in making investment decisions.
Your bookkeeper can only prepare your business’ financial statements. You need an accountant to interpret those statements and create financial forecasts based on current data. Accountants are also knowledgeable about cost accounting and can advise whether you should reduce spending, increase inventory, or raise prices.
Most importantly, a full-service accountant helps you adhere to Generally Accepted Accounting Principles (GAAP) in your accounting system so as to reduce your costs to operate and minimize any potential income tax you owe. This way, your accountant is prepared to fill out your tax return at the end of the year without facing considerable surprises.
Work With a Dedicated And Experienced Full-Service Accountant
At Remote Accounting Online, our team of tax consultants and certified public accountants are experts in the field of tax deductions, tax structures, and regulations that come with all kinds of business processes (including mergers). To talk to one of our accountants for a consultation, please call us at 541-772-5555 or complete this online form.