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The Difference Between Bookkeeping and Accounting Services

What is the difference between bookkeepers and accountants? The answer to this question depends on what your business needs. If you are a small or medium-sized company that does not need an accountant for tax preparation services, then it makes sense to hire a bookkeeper who can handle all of these duties.


However, if your business requires more than basic accounting functions like payroll processing, inventory management, cash flow analysis, etc., then hiring an accountant may be necessary. Here’s why…


Accountant:

An accountant prepares financial statements such as income taxes, balance sheets, and profit/loss statements. He also helps prepare reports about how well your business has been doing financially over time.

An accountant will help you with preparing your annual report so that you have something to send out to shareholders. In addition, he will provide guidance when it comes to setting up complex internal controls within your organization.


Bookkeeper:

A bookkeeper provides general day-to-day support for keeping track of records, making sure transactions get entered into the right accounts, reconciling bank deposits against check payments, and other similar tasks.

A good bookkeeper should know where everything is stored and how to access them quickly. She should be able to keep track of incoming mail and outgoing mail. Finally, she must ensure that all relevant information gets recorded properly.


What Is a Bookkeeper?

A bookkeeper keeps track of day-to-day activities within a business. His or her primary responsibility is to ensure accurate books are kept. Other responsibilities include reconciling bank statements, creating monthly budgets, tracking cash flow, calculating profits and losses, and reporting to management about finances.

Most bookkeepers work from home and report their findings via computer software that's connected to the Internet. They also maintain control over financial data using spreadsheets. Some even prepare tax returns at no charge. However, some bookkeeping services offer other perks including free training and assistance with payroll.


How Much Do Bookkeepers Charge?

In general, hourly rates vary depending on experience level and location. The average rate for entry-level bookkeepers ranges anywhere from $15-$50 per hour. Rates increase based on additional skills and qualifications. Experienced accountants earn around $25-$100 per hour.


Are Bookkeepers Required By Law?

No. According to IRS regulations, it's perfectly legal for businesses to employ people who perform only bookkeeping functions. If you choose to hire a bookkeeper, however, there are several benefits to doing so.

First, having a professional manage your finances makes it easier to stay organized. Second, having a bookkeeper ensures accuracy when recording key financial details.

Third, it gives you peace of mind knowing that you won't miss any important deadlines due to lack of knowledge. Finally, many professionals believe that working together with an accountant improves communication among team members.


What Kinds Of Books Can I Have My Bookkeeper Keep Track Of?

Your bookkeeper will create various kinds of documents related to your business. These include profit and loss statements, balance sheets, and cash flow projections. Each document contains different amounts of detail and uses different terminology.


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