Bookkeepers & Accountants: What do I Need To Support My Business?

Bookkeeping and accounting are closely related fields and are often confused or blended together.As a business owner or a not or profit leader - you almost certainly should have a professional in each of these fields supporting your work. A bookkeeper and an accountant who both understand your goals and who can work well together can be a huge asset to your business or organization.  Let’s look at the differences between bookkeeping and accounting so you get a clear picture of why both are so important.

It’s important that before we dive into the traditional difference of an accountant's role vs a bookkeeper's role to state that there are levels of experience with both professional roles as well as industry specialties, niches, and passions that play a part in the service that each may offer.  These differentiators are part of what can blur the line between the two. 

Traditionally, bookkeeping is described as the process of recording financial transactions, such as sales, purchases, payments, deposits and receipts. It is a vital part of the accounting process, as it captures the data that is used to generate financial reports. This can seem quite administrative in nature.  Accounting, on the other hand, is traditionally seen as the process of analyzing, interpreting, and communicating financial data. It includes activities such as financial forecasting, budgeting, and preparing financial statements for tax and government filing, doing audits and tax planning, as well as providing advice on other financial matters.

As the capacity of technology has developed and nearshore and offshore outsourcing have been more widely adopted, the scope of the bookkeeping role has been expanding and now frequently involves creating financial statements, supporting the budgeting process and providing other useful reports and insights into a business’ financials.   

With bookkeepers taking on some of these more traditionally accounting functions, more accountants are enjoying the opportunity to specialize in their areas of passion and expertise, such as family businesses, charities, manufacturing etc.  They are also able to spend more time in the process of analyzing, interpreting, and communicating financial data to support the organization's financial success. 

It’s important when looking to fill these roles for your business that you are clear about what you need in terms of experience, knowledge, focus, and what you are looking for from each role so that skills and experience are used most effectively. As you can see, both a bookkeeper and an accountant can bring a unique perspective to your business. Finding the right combination can be a huge factor in your success.