- April 8, 2021
- Posted by: Simply Finance
- Category: Accounting
The same mistake are often made by new companies who don’t know much about financial services: think that bookkeeping and accounting services are the equal. It is important to understand the differences before hiring a financial expert to help with your company needs so that you know if an accountant or bookkeeper is to be employed.
Management of your financial activities.
Early in the business phase, financial details like invoicing, payments, payroll and other financial activities are usually processed by business owners. Usually, it is motivated to cut expenses, so there is more money to reinvest in areas where the company needs additional support.
The problem is that most owners are not familiar with the specific financial management strategies of companies. You may be making mistakes that cause long-term problems with your reporting, even if you do your best to maintain financial monitoring and facting. Small errors, such as overlooking expenses or entering the incorrect amount of the invoice, can have a domino effect. For example, if you report and the figures were wrong, it might lead to cash flow problems because you decide on the basis of false information.
Invest in a bookkeeper or accountant
You have many responsibilities in supervising your company’s ongoing activities. There is no reason why your daily tasks such as data entry and report generation should be taken into account. Instead, hiring a bookkeeper or accountant is a big investment that can help your business grow.
The longer you refuse to transfer busy work to others, the slower your business growth will be. It gives you more time during the week to hand over some responsibilities, such as accounting and bookkeeping. Use this extra time to focus your company’s business activities in the future.
Actually, outsourcing could be one of the best investments for your company. If you want to maximize your time, you need quality systems and a good support team to keep up with the ongoing work on these systems. Bookkeeping and accounting are the basis for ensuring that you have the cash to maintain everything else in business.
What’s the difference: Accountant or Bookkeeper?
Here is a summary of the difference between a bookkeeper or an accountant:
Bookkeeper Role: Hiring a bookkeeper means that you bring a team member to your book who is responsible for data management. In addition to keeping a librarian up to date with ongoing transactions, these tasks are frequently completed in order to maintain the records. Bookkeeping services include all expenses and revenue for transactions. Bookkeepers also support ongoing financial tasks, such as payroll, billing and more. The basis of bookkeeping services is that the accounting system is always filled with exact data. These services support the financial system as a whole so that reports can be drawn up and bills paid at the correct time.
Accounting role: Small business accountants sometimes handle some of the above-mentioned bookkeeping duties. In order to ensure correct transaction data, an accountant often monitors the bookkeeper. Additional account abilities may include general record entries, billing, reconciliation of payroll and a review of accounts payable. The bookkeeper focuses mainly on account transactions, but an accountant works more on cash flow management, the preparation of taxes and other data necessary for managing a business’ financial health.
If you need all of the above services, you can hire a financial management team – including bookkeeping and accounting – better.
You can benefit from the services of a Chief Finance Officer if you are looking at the longer “big picture” financial perspective of your company (CFO). Outsourced CFO services can help the company thrive on the basis of profound financial management and implementation of strategy. Other financial responsibilities such as capital structure, investment, equity and debt are also overseen by CFOs.
Divide duties and employ the right team
Although all of the above-mentioned tasks fall into the category of financial management, it is essential that you have an obvious separation of responsibilities and an understanding of the whereabouts. Building the right team provides you with the necessary skills. Moreover, this tariff separation minimizes your company’s risk of fraud.
If you have a bookkeeper who pays your bills, they should not be the same person who reconciles your accounts every month. When at least two individuals are involved, the chances of someone stealing money or modifying the accounts for financial gain are minimized. When you have an accountant or bookkeeper assisting you with financial monitoring and obligations, make sure you have solid checks and balances in place.
Here’s an example of how you might divide responsibilities to create checks and balances in your financial system:
- The data entry is the responsibility of the bookkeeper.
- The accountant is in charge of reconciling the work that the bookkeeper has done.
- Supervising the work of both the accountant and the bookkeeper is the responsibility of the company owner, CFO, or controller.
Simply Finance is a small business accounting company that specializes in small businesses.
Simply Finance team will provide you with the outsourced accounting services you need. If you are a small business owner considering hiring an accountant or bookkeeper, we invite you to contact us to learn more about the full range of services we provide.
We are sure that our services are a good match for startups and entrepreneurs because we specialize in small business accounting. Contact us to learn more about the services we provide and to see if our team is the best fit for your company’s needs. We take a holistic approach to small business financial management, including accounting and bookkeeping services customized to your unique needs. Call us at +971 52 343 9189, 043882582 to speak with a financial expert about your options.