05 Oct Bookkeeper vs. Accountant [Part One]: Why Do Books Matter?
What’s the difference between bookkeeping and accounting? If you are like most small business owners you toss them around interchangeably.
While their areas of expertise and tasks CAN crossover, there are some important clarifications to consider when deciding which you need and for which tasks. Going to the correct support can save you both money and efficiency (read: TIME back in your hands!) so we have put together a little helpful overview.
Before we get to the difference, we need to clarify what our books actually are!
Although almost everything is digital and automated these days, we still refer to “our books”. What does this even mean? The term harkens back to the day when clerks painstakingly hand wrote by candlelight lines and lines of every single financial transaction that ever moved in or out of your business. –Note: If your bookkeeper STILL hand-writes your expenses and profits in a book….run, don’t walk, RUN to your phone and give us a call! — Today books may be stored in a digital cloud but they still SHOULD contain EVERY SINGLE financial transaction that moves in and out of your business accounts.
If you spent $1.57 at a coffee shop on a business trip, if you made $157,000 on the sale of some of your business equipment, if you collected $157 of sales tax on a product sale. Does your business own something that is worth something? Put it on the books! No matter how big or little, all of it should be accounted for!
While a big part of this is for accountability to your state and federal agencies for tax and compliance purposes, the benefits for your own business are endless! You want to be able to see at a glance what your business is worth. How much you owe, how much people owe you, how much you are making and spending in a month. We say ENDLESS because those are the kinds of numbers that empower you to make smart business decisions and drive your company to greater and greater success!
So whether virtual or hard copy, your books are a record of everything that is moving in and out of your accounts. Now that we have that established, we want to consider the relationship that a bookkeeper or an account might have with those books. Both are interacting with the same data but in a much different way!