Letter From a Confused Business Owner: Bookkeeping vs Accounting

I’ve got to be honest. I have an accountant and a bookkeeper and I’m not sure if I need both. Aren’t they the same thing? –Mary L., Raleigh, NC

Before you go and fire your accountant or decide to part ways with your bookkeeper, it’s important you understand the difference between the two and the ways they both contribute to your business.

Bookkeeping

Bookkeeping” is not a synonym for “accounting.” The former is really just about maintaining records while the latter refers to a rigorous process of financial management. Don’t get me wrong, bookkeeping is an important way for businesses to organize data. Bookkeepers do exactly what their title suggests – they log information and maintain a record of transactions.

They’re knowledgeable about your payroll, recent invoices, and balance sheets, but they aren’t the person you would go to for reviewing financials, forecasting and providing objective guidance on important business decisions—that would be your accountant.

Accounting

A good accountant does more than balance your books and make sure you’re ready for next year’s taxes. They plan for future growth and success. They help you leverage software that gives you the power to control and monitor your own financials. In essence, they help you make good decisions.

Your accountant should be part of your team— they should guide you through the information you’re looking at and advise you on the decisions you’d like to make. Accountants do more than just organize data, they offer objective intelligence to help your business grow.

We recommend working with an outsourced bookkeeping and accounting firm that can offer you both finance expertise and bookkeeping execution. Both are valuable but more powerful when used in tandem.

Shoot us some info and we can help get your accounting and bookkeeping concerns figured out.