The life and death of small businesses rely on accurate bookkeeping and leveraging the management contributions of accounting. Bookkeeping and accounting provide the foundation on which owners will make business decisions for expansion and development.
Not all owners, however, understand the difference between the two. Awareness of these differences can contribute in the improvement of both business operations and strategy making through helping create a clearer connection between bookkeeping and accounting roles and business success.
What Does a Bookkeeper Do
A bookkeeper’s most decisive role is maintaining the financial records of the organization. They keep company expenses, income, payroll, and tax payments updated. For recording items, general ledgers or journals are used.
However, due to advancements in technology, small businesses are increasingly using accounting software to electronically track debit and credit entries. Furthermore, bookkeepers communicate with coworkers every day and monitor procedures for submitting receipts and reimbursements.
All these daily activities may appear mundane but are fundamental to the basic operation of small businesses. A bookkeeper must be able to diligently perform these routine responsibilities.
Understanding the Role of an Accountant
Bookkeeping provides the financial data for the organization, but it is accounting that turns data into information for decision-making. Accountants have vital roles of verifying data and using it to produce reports, analyze accounts, conduct audits, and generate financial reporting records. They also do tax returns, income statements, and balance sheets.
Analyzing financial information contributes to knowledge of business trends, growth opportunities, and cash flow decisions that can drive business expansion. Accountants see the business from a bigger picture, their vision of the business from the accounting side. Accountants determine how transactions must be handled better, in ways that will support business strategies. The bookkeeper, in turn, carries out this vision.
Some small businesses hire an accountant and perform bookkeeping on their own using software from their accountants. Others are large enough to hire bookkeepers and accounting firms. Whatever their employment decisions are, they must realize how bookkeepers and accountants affect business expansion through providing accurate and timely data and insights for strategic decision-making.
Finding the right bookkeeper or accountant in Naples, SC is like choosing a business partner. Small businesses should understand that accountants and bookkeepers work together in helping not only operate the business but also support its long-term growth. Hence, accountants and bookkeepers must be chosen for their basic skills and dedication in helping owners attain business success.
Sources:
“Accountant vs. Bookkeeper: What Do They Do for a Business?”, Marci Martin, Business News Daily
“The Duties & Responsibilities of Bookkeepers,” Kristine Tucker, Chronicle,
