Accountant vs. Bookkeeper: What Do They Do for a Business?

Small businesses live and die by their cash flow and accountability. Accurate recordings of transactions, coupled with proper assessment and processing, give small business owners a firm base on which to make decisions and create plans for growth.

Recording and understanding the sales, expenses and other basic business data should be easy enough for small business owners. But understanding the accounting needs of a business is not always so simple. What type of activity is considered bookkeeping, and when do you need an accountant instead? Is there even a difference between the two?

There is, and it is a simple but important one: Bookkeepers record a company’s day-to-day transactions, while accountants verify and analyze that information.

A bookkeeper’s territory is daily financial transactions, which include purchases, receipts, sales and payments. Recording these items is usually done through a general ledger or journal. Many small businesses use software such as QuickBooks or Peachtree to keep track of their entries, debits and credits. Their efforts culminate in a trial balance, which means the final total of debits and credits match.

The role of an accountant, therefore, is to verify the data entered, and then use that data to generate reports, analyze the account, perform audits and prepare financial reporting records, like tax returns, income statements and balance sheets. An accountant’s analysis of the financial information can provide information for forecasts, business trends, opportunity for growth and when to restrict spending to manage cash flow.
Read the other half of this article on Business News Daily here: http://bit.ly/2i8qqhR
2016-12-26T21:30:08+00:00

Leave A Comment