In the world of finance, bookkeepers and accountants work hand-in-hand. While they are both responsible for keeping your business in good financial health, their roles and responsibilities are quite different. Let me help clear up the confusion:
Bookkeepers:
A bookkeeper’s job is to maintain accurate and up-to-date financial records (aka keeping track of all money that moves in and out of your business). Their primary tasks involve recording daily transactions — such as purchases, sales, receipts, and payments — as well as reconciling accounts, managing payroll, and preparing financial statements using specialized software and accounting systems. Their work centers on precision and attention to detail, making sure that all data is appropriately categorized to create an accurate picture of your company's financial activities. Bookkeepers provide the essential data that accountants use to do their jobs.
Accountants:
An accountant analyzes the financial data a bookkeeper records and provides you with important business insights and financial advice based on that information. They interpret financial statements, perform cost analyses, create budgets, and provide financial advice to support business growth. Accountants also play a vital role in tax planning, providing information for forecasting business trends and identifying opportunities for growth.
Now you might ask: Can't I do my own bookkeeping?
Of course you can. In fact, if you are just starting out in your business, you probably should. It's important to have a thorough understanding of daily operations and the workings of your business model. However, you know it's time to hire a bookkeeper when your financial records have become a mess or if you start passing on business opportunities because you're too busy hunting down receipts or reconciling accounts. Essentially, when you want to stop worrying about your finances and start focusing 100% on your craft - it's time to get a bookkeeper. Want to take a deeper dive? Check out my other blog post: Signs You Are Ready To Hire A Bookkeeper.