As a business owner, you know that it's vital for your financial records to be up-to-date and accurate. Not only does this let you know how your business is doing, but it yields info that can assist you with steering the future of your business.
To keep your business's financial information organized and current, you may decide to hire a professional who specializes in financial tasks, like an accountant or bookkeeper. Though there are some individuals willing to handle both accounting and bookkeeping tasks, many professionals prefer to do one or the other. Keep reading for info that can help you determine if your company needs a bookkeeper, accountant, or both.
Determine Whether You Need Advice for Your Business's Financial Situation
Decide whether you simply want help organizing your company's financial records or if you also need advice concerning decisions that will impact the future health of your company's finances. A bookkeeper typically handles the necessary tasks to keep your financial records organized and easy to examine. Some tasks that your bookkeeper might handle include:
- Recording financial transactions
- Issuing payments to suppliers
- Reconciling bank accounts
- Completing payroll-related tasks
- Tracking cash flow
It is possible for your bookkeeper to provide advice, but this advice will be more geared towards improving your day-to-day operations. Your bookkeeper might suggest ways you can streamline tracking your expenses or offer solutions for improving your company's budget.
Your accountant will take the information prepared by the bookkeeper and use it to produce more complex financial documents or make recommendations regarding specific issues. Accountants tend to make "big picture" recommendations that incorporate multiple aspects of your company's financial situation. For example, you may wonder if your current business plan is efficient at lowering your tax obligation. An accountant can assist with identifying moves that can minimize your tax liability without impacting your growth.
Decide If You Need In-Depth Financial Documents
If your organization needs to produce complex financial documents, like an income statement or cash flow statement, you'll want to employ an accountant to handle these tasks. These documents may be necessary if you're trying to attract new investors to your company or need to keep existing investors updated about your company's current financial position.
However, some type of bookkeeping is required to obtain the information necessary for these financial documents. You can do your own bookkeeping or outsource the job to a dedicated bookkeeper. Your bookkeeper can collaborate with your accountant to provide them with the necessary information and answer any questions that have about your financial transactions.