Part of owning a business is managing its finances. But if you’re up to your eyeballs in account entries, you may want to bring in someone to help. So, do you hire a bookkeeper or an accountant?
The short answer: It depends. If you simply need someone to enter day-to-day transactions into your accounting system, a bookkeeper is likely your best bet. But if you need someone to interpret and analyze your financial data, a business accountant is almost certainly the answer.
Still unsure of which financial professional is right for your business? Here are a few questions to consider when making the call.
How large is your business?
If you have only a handful of employees, it’s safe to say a bookkeeper may be sufficient. But if your company employs 30 or more, consider an accountant. Companies of this size could run into complicated issues with payroll, taxes, and more. An accountant can take care of it all, so you can focus on running your business.
What are your bank’s reporting requirements?
Depending on the size of your loan, your bank may require you to submit financial statements once per quarter or more regularly. Having solid financial statements is critical, as your bank will carefully scrutinize each one. If you’re in this position, working with an accountant is a must. Your accountant can compile your statements in accordance with all applicable regulations, saving you time, money, and, of course, future headaches.
How do you make management decisions?
The typical small business owner doesn’t have to consult financial statements before making every decision. Larger businesses, however, usually have a board of directors that bases its management decisions on the latest financial statements. If you identify with the former, you may get along just fine with a bookkeeper. But if you need to report to a board of directors—or if you plan to in the future—an accountant can help you prepare and present financial statements, and also advise on management decisions.
Final question: Hire or outsource?
Regardless of whether you need a bookkeeper or an accountant, it’s important to weigh your options for hiring a full- or part-time employee or outsourcing the role. Having an accountant or bookkeeper on staff may make sense for some organizations. For others, outsourcing the role eliminates the cost of maintaining a salaried position.
Experience peace of mind with the right person
The accuracy of your business’ financial data is critical to its success, which is why working with a financial professional—whether it’s a bookkeeper or an accountant—is a wise move. The right person will handle your accounting functions with ease, giving you fewer reasons to worry and more sleep at night. Ready to explore your options? If you have questions about bookkeeping versus accounting, please give me a call.