Bookkeeping and accounting – do the two terms sound synonymous to you?

Do you often use the two interchangeably?

This remains a hot topic of discussion among companies because there is often a lot of confusion about it. Sometimes it can be difficult to understand the difference between the two. For example, both accountants and bookkeepers work with your ledgers. Still, there are some differences that every entrepreneur needs to be aware of before deciding which one to hire.

Some of the questions that might come to mind when hiring an accountant could be:

How do I know if my business needs an accountant or an accountant?

Do I need one permanently or can I rent it on a contract basis?

Do I hire a virtual accountant or an in-house one?

Do I only need an accountant if I own a small business?

This blog will help you understand the two roles in detail so you can choose the ideal fit for your business.

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What does an accountant do?

First, let’s understand the role and responsibilities of an accountant. An accountant is responsible for recording day-to-day financial transactions, updating a general ledger, and preparing trial balance sheets for accountant inspection.

You will also maintain the necessary documents for tax compliance, monitor cash flow and assist in the preparation of financial reports that help management make strategic decisions. Here are the most common duties of an accountant:

• Maintaining a balanced ledger
• Preparation of the trial balance sheet for the accountants
• Monitoring deviations from the estimated budget
• Setting up different accounts
• Maintaining records of financial transactions
• Assisting in the preparation of the financial reports by collecting, analyzing and summarizing accounting information
• Development of a system for accounting of financial transactions by creating a chart of accounts

Additional responsibilities may exist based on the unique needs of your organization. For example, an accountant may be required to learn a particular accounting software system.

What does an accountant do?

Unlike an accountant, an accountant may need to summarize the numbers provided by the accountant, but this is only part of his skill set. Having sharp logical skills and problem-solving skills in the big picture is crucial. In addition, accountants need to use the small pieces of information provided by the accountant to draw much more meaningful and comprehensive conclusions. Here are the most common duties of an accountant:

• Preparation of income tax returns
• Conducting reviews of various annual accounts
• Conducting account analysis
• Conducting routine checks to ensure that the financial statements comply with ethical standards.
• Preparing forecasts and what-if analyses
• Monitoring of indirect taxation and preparation of returns
• Assessment of financial risks related to contracts
• Assisting with business decisions such as outsourcing provisions and reserves.

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Who fits my company?

Now that we’re clear on the roles of accountant and accountant, let’s return to our original question: Who are we hiring?

The answer is that you need to hire an accountant and an accountant for your business. Let’s discuss this in the context of the size and nature of your business:

1. If you are a small business with a lower transaction volume: You should have both roles part-time. A regular accountant can spend a few hours a week managing transaction entries and ensuring documentation is in place. You can hire an accountant for specific needs like audits and tax returns.
2. If your transaction volume is higher, you may need a full-time accountant (one or more accountants). Accountants can be hired on a fee basis.
3. For larger companies and corporations, the transaction volume and complexity are higher. As a result, you need a team of accountants and accountants to manage your accounts.

I’m also often asked: couldn’t we just leave the bookkeeping tasks to an accountant? Well, that’s probably not an optimal solution. Accountants are much more expensive. The accounting hours required are many more than those required for tax returns or other accounting activities. It will escalate costs without delivering incremental benefits.

Further accounting can be done remotely from offshore locations to further reduce costs. Virtual accounting is an efficient, cost-saving solution for modern businesses that want to improve their operations without breaking their budget. With virtual accounting services like Wishup, you get the quality of a full-time accountant at a fraction of the price.

Make the smart choice for your business

In conclusion, I would say that these two roles are critical and sensible. Hiring an accountant will help you run operations more efficiently, increase accounting accuracy, and reduce your costs.

If you’re interested in growing your business with our team of virtual accounting assistants, click here to schedule a free consultation today or email us [email protected]