What is the difference between a bookkeeper and an accountant? Why should I hire professional bookkeepers? These are just few of the questions being ask by many business owners, especially those who are new to their business.
Firstly, without bookkeeping there is no accounting. Bookkeeping is the nuts and bolts of a company’s paperwork. It is the preparation of all paperwork prior to accounting. Without the services of a bookkeeper, your company is at risk, why? It will be explained later on this article.
Bookkeeping is about recording all the data of a business in order, ready for either an accountant or to be sent to HMRC.
Accountancy is somewhat more complex. There is far deeper analysis involved. Accountancy checks the standards, principals and statutory requirements are all properly in place. Use this as your reference and you can be sure you are tracking the good way.
It is often joked that the difference between a bookkeeper and accountant is price. This is mostly very true. It is not uncommon for smaller companies to have both a bookkeeper and an accountant. This is due to bookkeepers having lower rates. The bookkeeping is the long, tedious side of the paperwork, collecting all the information and placing it in the correct order. If a bookkeeper can handle the paperwork for handing over to the accountant, this can save vast amounts over the accountant taking all of the responsibility, which ultimately would mean more time on a higher rate.
On the subject of cost, it is important to understand the different types of bookkeepers there are.
There are large corporations or companies and there are individuals who often work from home. The latter can be very effective as their fees tend to be lower and they can relate more with the small business type. The experience can be a little friendlier and bespoke, rather than dealing with an employee. The relationship you have with your bookkeeper is important as it can come in handy when there’s a problem to solve or any confusion for either party regarding the process. A happy bookkeepers Melbourne will be eager to help and offer advice with any tough business decisions you may face. However, there are also bookkeeping company that are not performing well so it will be your task to search for their reputation by searching their names online.
If you have both a bookkeeper and an accountant, it is important they both understand the expectations of each other. Having both means there is a hand over period somewhere along the line and no stone should be left unturned due to confusion of responsibility.
A good bookkeeper will speak with you every month and run over everything that’s been happening in the business, so they have good understanding of where the business is and where you would like it to head. It will also give you a good insight into how you’re handling your paperwork and if it can be honed to make life easier for everyone.
Check out this post for more informations: http://chandlerazaccountants.com/why-should-you-chose-bookkeeping-firms-to-deal-with-your-financial-issues/