Bookkeepers or Accountants – Who to Hire?

Keeping your finances up-to-date and categorized is important for your business’s success. This allows you to make sure your cash flow is healthy and you make beneficial decisions for your business.

Small businesses can track their finances themselves, but as you grow and become established, it becomes hard to do this by yourself. So if you are thinking about hiring a professional bookkeeper or an accountant but you are not sure who is best for the job, then this article is for you. This guide will help you make a wise decision.

Bookkeeping and accounting

Bookkeeping is the process of recording all the financial transactions, whether sale or purchase, conducted by your business. While accounting allows you to gain insights into the data collected by bookkeeping and use it for the benefit of the business.

What do they do?

Bookkeepers record all the transactions that happen in your business in an easy way and maintain it regularly. Typical tasks that they do include keeping a record of financial transactions, credits, and debits, creating invoices, balancing and managing accounts and ledgers. The main task being the management of ledgers to keep track of sales and purchases. Everything needs documentation. There are no educational criteria for a bookkeeper, but they should understand and have basic knowledge about finances.

While an accountant looks at the bigger picture, they analyze and study the financial data collected by the bookkeeping and turn it into useful information. Based on the data, they give useful advice for the success of your business.

Typical tasks carried out by an accountant include studying data, providing advice regarding trends in businesses and success opportunities, making predictions, helping owners make good financial decisions, make reports, balance sheets, income statements, and tax returns, and also perform audits. This all helps you understand where your business stands, what steps you can take for success, what can be expected in the future etc. An accountant can be a bookkeeper, but a bookkeeper cannot be an accountant.

Credentials of bookkeepers and accountants

Even though bookkeepers do not need any certification to get hired, there’s licensing available. This accreditation is provided by the Certified Professional Bookkeepers of Canada (CPB). With professional bookkeeping Canada license bookkeepers become more credible with improved value and visibility. They get more and better opportunities as they have the skills and knowledge needed for bookkeeping.

While for an accountant, a bachelor’s degree from an authorized university is important. Apart from that, there are various qualifications like licenses, certifications, and experience. A certified public accountant CPA is more skilled and knowledgeable as compared to just an accountant. So it is important to look for potential candidates who have communication skills, knowledge about software, and know about tax laws and codes.

When to hire?

Small business at the start may not require help, but later on, it becomes crucial that you hire a professional for the job. If you are experiencing the following, then it’s time for you to hire a professional asap.

•       You are Facing difficulty in handling complex taxes.

•       You spend more time on accounting and bookkeeping tasks instead of focusing more on your business’s growth.

•       Your business is in its growth phase.

Conclusion

So when you look for a professional, it is important for you to decide whether you want to hire a full-time employee or a consultant service. For good bookkeepers, you will need referrals from colleagues and friends. So the person you are going to need depends upon your business size and the amount of bookkeeping you need.