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As a small business owner you know how important it is to have clean and accurate financials. If you are just starting out you may have a software program such as Pro-Ledger Online that enables you to make bookkeeping entries and view financial reports at anytime/anywhere. However, as your business grows and the demands upon your time increase it becomes prudent to hire a professional bookkeeper and accountant.

You may be asking yourself, “Why do I need both? Can’t an accountant handle my day to day books?” While there is nothing wrong with this idea, there are several reasons why it is best practice to keep them separate.

Before listing the reasons for hiring both, it is helpful to be aware of the specific duties of a bookkeeper and accountant. There are numerous articles you can read to learn about their roles in detail. However, this chart below highlights some of their different and specific duties.

 

Now that there is a clear indication of the different duties bookkeepers and accountants have, let’s answer the following question:

“WHY” Hire a Bookkeeper and an Accountant?

 

1.  A Bookkeeper is Less Expensive

Bookkeeping is labor intensive. Since the hourly fee of your accountant will be much higher than the services of a professional bookkeeper you will save with the latter. Furthermore, a bookkeeper will likely complete your books faster than an accountant. In fact most accountants will admit that bookkeeping is not their strength or their interest. They would rather focus on the big picture. More often than not they will encourage you to hire a bookkeeper.

2. A Bookkeeper Provides Consistent Service

Since bookkeepers handle the day-to-day transactions of your business they are going to provide you with consistency. They will have a clear understanding of what goes on daily, weekly and monthly. A bookkeeper focuses on the little things and makes sure your accounts are reconciled down to the last penny. Ideally they will provide you with a clean and accurate set of books that are updated on a monthly basis.

On the other hand, an accountant as your bookkeeper could potentially lead to a few problems. Most accountants are very busy. As such, you might not get the consistency you would with a bookkeeper. You may have trouble reaching and connecting with them. Furthermore, their focus on your books may be more sporadic and as a result real time visibility into your financials will be impacted.

It is critical that your books are accurate and timely if you are to be successful. Having a bookkeeper who understands the day-to-day workings of your business, and who ensures your books are updated on a consistent monthly basis provides consistency. Moreover,  your accountant at the end of the year will have an easier time, and together you and your accountant will be able to make sound business financial decisions going forward.

3.   Bookkeeping is Not Your Accountant’s Specialty

Bookkeepers and accountants are qualified to handle financials however, in different ways. As the chart above indicates both specialize in different areas.  In essence a bookkeeper lays the daily groundwork. At the end of the year the accountant steps into play. Accountants are best suited to “analyze” the data, to make adjusting entries, to help you with your tax return, to keep things organized and on the right track, to help you make good financial decisions. They are the engineers of your financials but they do not lay the sidewalk or paint the trim.

4.  Best to have a System of ‘Checks and Balances’

Having two sets of eyes helps prevent errors and fraud. If your accountant were to do your bookkeeping they may be less likely to catch their mistakes or oversights when it comes to the year end accounting. It is like looking at a picture too closely day after day. It is important that one can view the picture from a distance to see the fullness of it. Having a bookkeeper see the details, and the accountant view the overall picture provides the best of both worlds.

Sadly, it isn’t unheard of that a small business gets taken advantage of when one individual is responsible for the businesses financials. Fraud, embezzlement and other financial violations are real. However, having both the bookkeeper and accountant lessens the possibility of one or the other taking advantage of your trust and your business.

When you have a bookkeeper and an accountant involved, they BOTH can advise and catch items that are in error. Errors are reduced and you get a system of checks and balances.

Take Away

If you are just starting out as a solopreneur/entrepreneur it may not be necessary at this time to hire a bookkeeper and/or accountant. Granted your finances may be tight and a software program like Pro-Ledger Online will be all you need for the time being.

As your business grows and the demands upon your time increase, keeping track of your finances will become more challenging. It is at this point you will want to have professionals to assist you.  You may just consider hiring an accountant and have them also be your bookkeeper. However, as the previous explains it is likely not the best. Having a bookkeeper and accountant working in harmony will make you the winner.

Have experts take care of the financials while you focus on running your business.

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Pro Ledger Online offers a cloud-based bookkeeping solution for small business professionals. Click here for a 30-day free trial. – www.pro-ledger.com “Bookkeeping Made Simple”

 

The post Why Hire a Professional Bookkeeper AND Accountant first appeared on Online Bookkeeping Software for Small Business | Easy & Inexpensive.

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