Check If Your Small Business Requires A Bookkeeper Or An Accountant?

In the early stages, business owners usually try to handle financial tasks to save money as much as they can, to invest in business growth. Those financial tasks include payroll processing, invoicing, managing taxes, and a lot more.

But as the business grows, it becomes hard to manage some critical financial tasks like the BAS lodgement, payroll processing, managing financial records and tax returns. These tasks are time-consuming, and even a single mistake could lead you to make some wrong financial decisions. That is when a business owner thinks of hiring a financial professional. But still, some people get confused if their business requires an accountant or bookkeeper or do things on their own?

However, it is obvious to get confused for those who are not expert in financial aspects. So, first, you need to understand the difference between these. The fact is that some concepts of accounting and bookkeeping are different from each other, and it is necessary to understand that difference.

What Is The Difference: Accountant Or Bookkeeper?

For most people not being an expert in financial management, there is a misconception that both bookkeepers and accountants manage financial records to create reports and manage taxes etc. However, bookkeepers and accountants occupy distinct aspects of financial management.

Here you will get an overview of understanding the difference between a bookkeeper and an accountant.

What Is A Bookkeeper?

A bookkeeper is a professional who records then classify the potential financial transactions of a particular company. Those transactions include the paid bills, sales records, payroll details etc. The main objective of a bookkeeper is to make a perfect picture concerning the finances of the company. Apart from being focused on the company’s finances, bookkeepers also hold a good understanding of various accounting principles of accounting.

What Is An Accountant?

An accountant is a professional who builds on the report which a bookkeeper conventionally generates. In short, an accountant provides a comprehensive picture of your finances.  The primary task of an accountant is to help business owners make better financial decisions by reporting them about the current economic conditions.

So, these were the primary differences between that of a bookkeeper and an accountant. However, at times, a bookkeeper can preside over accounting activities for smaller businesses. An accountant has to manage a comprehensive range of financial activities for a business of any size.

Roles of an Accountant

The roles of an Accountant are worth acknowledging, no matter whether it’s a start-up or enterprise. These include the following:

• Review of Accounts Payable Activity: It includes strategic reviewing of the accounts payable activity. 
• Cash-flow Management: Through effective cash-flow management, an accountant ensures that the finances of your business are in a good health.
• Preparation of Tax: An accountant can also help you lodge and pay your potential taxes on time so that you remain completely tax-compliant all the time. 
• Ledger Entry: A registered accountant is also responsible for the impeccable entry of your company’s ledger. 
• Reconciliation of Payroll: An accountant will ascertain that you’re paying your employees on time. As a result, you will attain complete peace of mind.  
• Strategic Billing: Through ingenious billing and invoicing, your accountant will streamline the transactional activities of your organisation.

In short, we can say that to maintain sound health for your company’s finances, hiring a qualified accountant is imperative. Unlike a bookkeeper, the roles and responsibilities of an accountant are way more upstanding. An accountant boosts up your company’s finances, thereby ensuring its cumulative progress.

Roles of a Bookkeeper

When you hire a knowledgeable bookkeeper, it implies that you have brought an adept team member to your organisation. A bookkeeper is chiefly responsible for managing the crucial data comprising your company’s record. Some of the other tasks a registered bookkeeper is supposed to preside over include the following:

• Records Updating: A bookkeeper has to stay abreast of the current modes of transactions occurring from time to time. As a result, the professional can keep the records up-to-date quite effectively. 
• Invoicing: A qualified bookkeeper is also supposed to prepare invoices for a particular organisation quite strategically. In response to it, you can improve your company’s cash flow. 
• Payroll Management: Proper payroll management is the key to increase employeess’ trust in your organisation. Through impeccable management of payroll, your bookkeeper will ascertain that your organisation’s employees are getting their salaries on time. It leads to improved staff retention at your company.

Apart from these services, a bookkeeper is also responsible for maintaining accurate financial data. These data will act as a support system for the financial fabric of your organisation. As a result, you can maintain and keep track of your small business’ finances.

Outsourcing or In-House?

Well, if you read about the bookkeeping faqs and accounting faqs, you will understand the difference between the two. Despite this fact, the importance of adequate accounting and bookkeeping go hand in hand. That’s why it’s always better to select a company that provides both premium accounting and bookkeeping services.

Again it might be the case that you have a limited budget since you run a small business. Hiring an accomplished bookkeeper or accountant becomes a tricky task for you. Alternatively, you can use high-end accounting software solutions to complete the same tasks effectively.

Advantages of a DIY approach

Managing your accounting tasks using accounting software solutions can be a feasible option if your budget is limited. 

These software systems help you to complete the various bookkeeping and accounting tasks with the assistance of your in-house team. These software systems can help you to complete various bookkeeping and accounting tasks. Plus, these accounting software systems let you carry out financial tasks more accurately. What’s more, you can complete the tasks faster than ever and save time as well. So, if your business is in its initial stage, choose an accounting software system to look after your company’s financial health.

Advantages of Outsourcing

Opting for premium services of bookkeeping Perth or accounting solutions is a good option once your business starts expanding. This is because you now have a lot more transactions to record than before. So, it’s, therefore, a feasible idea to hire an End of Year (EOY) accountant along with a qualified bookkeeper. Needless to say, a well-versed bookkeeper or accountant Perth can provide you with the services stated above to the best of their ability. To get both accounting and bookkeeping services of the best quality, always feel free to contact Palladium Financial Group without thinking twice.