Bookkeepers vs Accountants
When most small business owners look for assistance managing their finances, they adopt their only choice is to work with an accountant. It’s factual that they will likely need one to finalize financial statements, provide tax-saving advice and to complete tax returns. However, many small and even medium sized business holders are pleasingly surprised to learn that bookkeeping services are lower cost alternative to managing the month-to-month finances of their companies.
Using bookkeeping services can save companies thousands of dollars each year, so let’s look at the differences between the two functions to help you feel confident that combining bookkeeping services with your accountant is the way to go.
The main difference between the two functions is that they are used at different stages of the financial cycle.
Bookkeeping is the function of recording daily transactions
How well your daily transactions are recorded is one of the keys to building a strong business foundation. Therefore, bookkeeping is so important. It’s comprised of
- Recording financial transactions
- Posting debits and credits
- Generating invoices
- Maintaining and balancing general ledgers and accounts
- Managing payroll
- Preparing interim financial statements
Maintaining a general ledger is one of the main components of bookkeeping. The general ledger tracks the amounts from sales and expenses. The complication of this duty depends on the size of the corporate business and the amount of dealings that are accomplished daily, weekly, monthly and yearly.
Accounting is the function of optimizing business decisions through data. Accounting is a high-level process that makes sense of information from the financial statements to support sound decision making for the business owner. This is much more subjective than bookkeeping, hence why it requires a highly trained professional. The process of accounting includes:
- Preparing adjusting entries
- Finalizing financial statements
- Suggesting ways to optimize the business based on the financials
- Completing and filing income tax returns
- Aiding the business owner in understanding the impact of financial decisions
The accountant will help business owners better understand profitability and cash flow implications. Therefore, business holders will often look to accountants for assistance with calculated tax planning, financial predicting, and tax filing.
Why use both?
Some business owners get peace of mind by having both functions completed by their accountant. The fact is that that peace of mind comes at a high price. Many accountants hire bookkeepers to take care of the monthly transactions and record keeping, yet charge rates that are reflective of an accountant’s time, which can be around $100/hour. The alternative is to hire a bookkeeping service provider who will charge around $50/hour for the same work. If an average small business requires 10 hours of bookkeeping a month, this is a savings of $500. Over the course of a year it’s a savings of $6000, which could go straight to the owner’s salary vs their accountant’s.
Bookkeeping is running a Special promotion for both existing and startup businesses.
If your business has basic bookkeeping needs, bookkeeping.com is offering a limited time rate of $159/month. Well take overhaul of all the setup work as part of your first month’s rate. If your needs are a bit more complicated, then well create a custom quote and provide a 30% discount on our standard rates.
Whether you’re viewing to save money or improve the quality of your service, our business advisors are ready to take your call and show you how we can help.
The startup package includes:
· Consultation with an experienced Bookkeeper
· CRA Registration (BIN, GST Account, Payroll Account)
· Set Up Chart of Accounts
· Orientation to Record Keeping
Fill out the form or visit our website and one of our consultants will contact you within 24 hours. For an immediate quote, call us at (866) 352-8827 email us at email@example.com