As a small or medium business owner, You might find yourself asking, “Why do I need both an accountant and a bookkeeper?” While they may seem similar, accountants and bookkeepers play distinct roles in financial management, each bringing significant value to your business.
Both an accountant and a bookkeeper are essential to the financial health of your business. They work in tandem to ensure not just compliance and accuracy in financial reporting but also to provide strategic insights that can help in making informed business decisions. Understanding and utilizing the strengths of both can set your business on the path to sustained growth.
Do I Need Both a Bookkeeper and an Accountant?
The short answer is yes.
A bookkeeper ensures your financial data is accurately recorded and organized, which is key to a company’s financial infrastructure. An accountant then uses this data to provide valuable financial insights and strategic advice. For a small or medium-sized business, having both a bookkeeper and an accountant ensures that you keep accurate records and have the necessary financial intelligence to drive business growth.
An ICAS study showed that 21% of small and medium business owners admit to not knowing enough about bookkeeping. Furthermore, 30% of small and medium business owners consider accountants to be their most reliable collaborators, indicating the critical role these professionals play in business operations.
Bookkeeping vs. Accounting
Bookkeeping and accounting, while closely related, serve different purposes for your business.
Bookkeeping is the process of recording daily transactions consistently and systematically. Bookkeeping services include tracking sales, purchases, payments, and receipts. Accurate bookkeeping is the financial and operational backbone of successful organizations. Without clean, well-maintained financial records, making informed decisions for your company’s future becomes a challenge. Your ideal bookkeeping partner should not only understand your organization’s unique needs but also function as an integral part of your team.
In contrast, accounting involves interpreting, classifying, and analyzing financial data provided by bookkeeping. It’s more about drawing insights and making strategic decisions based on the recorded financial information.
Related Article: The Key Difference Between Bookkeeping & Accounting
What Does an Accountant Do That a Bookkeeper Doesn’t?
Accountants focus on preparing and analyzing financial statements, advising on tax matters, and offering strategic financial planning using the data compiled by a bookkeeper. They play a key role in guiding business owners toward understanding the financial implications of business decisions.
Unlike bookkeepers, accountants are often qualified to represent clients in front of the IRS, handle complex tax matters, and perform audits.
“Combining the detailed record-keeping of a bookkeeper with the strategic analysis of an accountant provides a complete financial picture for any business. We work with many accountants when clients outsource their bookkeeping to us. That collaboration with accountants ensures accurate and strategic financial planning.”
- Heather Kirstein, Co-Owner, NorthStar Bookkeeping
Outsource Your Bookkeeping to NorthStar Bookkeeping
For many small and medium business owners, managing bookkeeping in-house can be challenging. Outsourcing your bookkeeping to a professional firm like NorthStar Bookkeeping is a wise strategic move. It frees you up to focus on running your business, knowing that your financial records are in expert hands.
For more information on how NorthStar Bookkeeping can support your business’s financial needs, contact us today. Our expertise in bookkeeping, combined with your accountant’s strategic input, can drive your business forward.