The Role of the Bookkeeper

Bookkeepers are an essential part of your business’s financial health. They are focused on the daily details of your business transactions. A bookkeeper’s goal is 100% accuracy and perfectly balanced books! All your transactions must be properly recorded in a timely fashion and reconciled each month.

While this used to be done in a hand-written ledger, most modern bookkeepers utilize accounting software. Cloud accounting has also become a very popular option, especially for independent bookkeepers servicing small businesses.

Depending on the size of a company or volume of transactions, a bookkeeper may perform daily, weekly and/or monthly maintenance on your accounts. Some larger companies have bookkeepers on as full-time staff. But most small businesses keep a part time bookkeeper to help them organize their finances.

Some of the specific tasks a small business bookkeeper would handle are:

Your perfect bookkeeper will need to fit your business and have experience in the tasks you want completed.

What about an Accountant?

An accountant can, but does not always, complete all the tasks of a bookkeeper. They have built on top of the bookkeeping knowledge base with a bachelor’s degree and lots of experience. An accountant will have a more expansive understanding of financial reports and business concepts. They will often help plan budgets and create business forecasts.

In a corporate setting, an accountant may be in a midlevel position or have a specialized department. For a small business, your bookkeeper may be able to function in much the same way as an accountant. In the eyes of the IRS, and without further degrees and certifications, an accountant and a bookkeeper are on similar levels.

The biggest differences are going to be education, experience and salary. Though, an experienced bookkeeper may have a leg up on a fresh accountant in some ways.

Certified Public Accountant

One level higher than an accountant is a Certified Public Accountant (CPA). A CPA would have the most education, knowledge, and highest reputation of all the accounting professions. They are required to have postgraduate and continuing education, as well as pass a standardized test to certify their expertise in business law, audits, taxation, and accounting. As the name suggests, CPAs must be certified by each state that they work in and maintain appropriate licensing. They can even be certified worldwide.

CPAs are most people’s go to when setting up a new company and preparing proper taxes. They also serve as trusted advisors, financial analysts and strategists, tax planners and more. They rightfully have a much higher income and can be a great investment for any business. Whether on an as needed basis or on retainer, you will know your bases are all covered with a CPA.

Who Should I Call?

Once your business grows it will become hard to keep up with the paperwork! Maybe you just want to make sure you start out clean and organized or you already know that payroll will just be too daunting. Either way, you are going to need some help.

A bookkeeper is the most economical choice for day to day transactions and accounting.

Depending on your business’s needs, and the abilities and experience of your bookkeeper, an accountant may be called for to handle the bigger items, such as financial reporting and business planning.  

When it is time to set up your business, during tax season, and whenever major legal and tax issues are involved you will call a CPA.

Having a good relationship with your financial professionals is key! They will work together to make sure your business is running as smoothly as possible!

Learn about how hiring a bookkeeper can be a game changer for your business!