Bookkeeping vs Accounting: Differences and Solutions
In essence, bookkeeping vs accounting should not be a battle. There are several factors that make them different, and choosing the right expert for your company is crucial to keeping your finances in check. On the one hand, bookkeepers take care of all of the money coming in and the money spent on active and passive expenses. On the other hand, accountants have different tools and knowledge to help your company with financial insights and tax returns.
In this article, you will explore the fundamental differences between bookkeepers and accountants. Although their jobs are similar, there are important distinctions between each one. In addition, if you decide to hire a bookkeeper, you can find a great solution at the end of this blog post.
Bookkeeping vs Accounting: Differences
Below, you will find the general differences between a bookkeeper and an accountant. As you will observe, some of their areas of expertise are similar, but one of them is able to provide you with financial advice, while the other can keep your numbers in check.
On-the-job training. Bookkeepers typically gain experience through on-the-job training. While they are not required to have formal education, most are certified through accredited training programs.
Software acquainted. Bookkeepers know about a variety of business software solutions. They can provide you with different programs to help you keep your finances in check.
Daily Basis. Bookkeepers are professionals who are aware of a business's finances, from simple day-to-day operations to higher and more complicated monthly active and passive incomes.
No tax preparation. Bookkeepers don't file tax returns other than payroll or sales taxes.
College education. Accountants often possess an accounting degree. Some of them are also certified public accountants or CPAs and enrolled agents or EAs.
Financial Insights. Accountants employ programs for tax planning and other financial solutions. However, It is not common for clients to work with these strategies.
Auditable. Most certified accountants can perform audits, provide attestations and produce certified financial insights.
Personal and Professional. Accountants often have a record of personal finances as well as company economics from the same individual.
Tax preparation. Accountants can file personal and business tax returns.
When choosing between a bookkeeper and an accountant, it's vital that you keep in mind these differences. If your small business is not that small, you may consider getting both services.
During the last two years, online services have grown up to 50% and have become a stable income for many. Outsourcing your company's bookkeeping to an online service may be the best way to go. There are specific bookkeeping tasks that can be performed by a Virtual Assitant, although they might vary from company to company.
Online service providers offer a more affordable option in comparison to hiring an in-office accountant. This is because they give you access to remote professionals who will be tasked with managing your bookkeeping. You can communicate with your bookkeeper through a variety of different avenues. They are available via email, chat, or even phone in some services. Effective communication is quickly becoming an essential part of the modern workplace. Not only does it eliminate the need to commute and go through a lengthy hiring process, but it also helps in creating a culture that values the needs of others.
These are the most viable options when choosing a bookkeeping provider. On the one hand, you are able to pay personalized attention for a small price with most companies. On the other hand, most small businesses need a mixture of some of these services to satisfy their bookkeeping needs. It is a matter of personal choice.
If you want to know more about virtual bookkeeping, you can schedule a free consultation with New Age Cubicle. Our expert bookkeepers are eager to work with you and make your already successful company's finances even better. You can ask for our different plans without you spending a dime. We only want the chance to show you how we can make your company's finances even better.
Bookkeeping vs Accounting
Bookkeepers and accountants are professionals that help your company with the accounting side of the business. At the same time, you keep focusing on a different aspect of the business, such as marketing strategies and client nurturing. Bookkeepers can be an invaluable asset to any company that they are working with because they provide an understanding of how revenue is made. Accountants, on the other hand, can give advice to help generate more revenue in general.
In the perfect setting, you would have a finance team that can solve money-related issues and provides observations on your books' current status. Unfortunately, not all companies have the budget for a financial team to outsource their economics to another company. In this situation, you can consider hiring a virtual bookkeeper and pair it up with an accountant when the tax return season comes.
Hiring a virtual bookkeeper is an excellent option for small businesses that do not have the budget for a financial team. These professionals have the right skills and knowledge to keep the books in order, but they can also help you create budgets, forecast revenue and expenses, and find solutions to any cash flow problems. When paired with a company's accountant, a virtual bookkeeper can also prepare taxes and payroll deductions.
As we mentioned before, it all comes down to personal preference and, most importantly, understanding what your company needs.