As a business owner, it's important to have a good understanding of your finances and the financial aspects of your business. This is where an accountant comes in. An accountant manages your business's financial aspects, including budgeting, bookkeeping, tax compliance, and financial reporting.
Of course, hiring an accountant comes with a cost. However, does your small business require an accountant or bookkeeping solutions? Here's how to find out.
The Process of Managing Your Company's Finances
The financial side of every company is something that you must take seriously. Managing your company's finances begins with keeping accurate and up-to-date records. This includes tracking income, expenses, assets, liabilities, and other financial information.
Bookkeeping entails recording and organizing financial data, such as sales, purchases, receipts, and payments. This method helps you make better decisions, plan for the future, and understand your company's financial health.
For most small businesses, bookkeeping is best done manually. You can keep track of your finances using a simple spreadsheet or accounting software. If you're uncomfortable with this approach, consider hiring bookkeeping solutions.
The Difference Between a Bookkeeper and an Accountant
When managing finances, it's important to understand the differences between bookkeepers and accountants. While both work with financial data, their roles and the services they provide are quite different.
Bookkeepers are responsible for managing the day-to-day financial transactions of a business. This includes recording and organizing financial data, such as invoices, bills, and purchases. Bookkeepers also often handle payroll and accounts receivable and payable.
Accountants, on the other hand, provide a more strategic financial perspective. They analyze and interpret financial data to determine the performance of a business. Accountants are also responsible for preparing reports and financial statements, such as the balance sheet, income report, and cash flow record. Additionally, they may advise on tax planning and compliance with tax laws.
In short, bookkeepers manage the financial transactions of a business, while accountants provide a more strategic financial perspective. It's important to consider the discrepancies between the two roles and determine which is best suited for your business.
Which Is the Best Choice for Your Company?
The answer will ultimately depend on how complex your company's financial situation is and the size of your organization. The benefits of hiring bookkeeping solutions can be enormous for small businesses and organizations. You won't have to fret about keeping up with the ever-changing tax laws or spending precious time dealing with complicated paperwork.
On the other hand, if you have a more complex financial situation, such as multiple entities, investments, or complex taxes, an accountant may be the better choice. An accountant can provide personalized advice that considers your unique financial situation and goals. Of course, this personalized advice costs more than a basic online financial management tool. Ultimately, it is best to consult a professional to determine which option is best for your company.
Final Thoughts
Depending on the needs of the business, either one or both of these positions might be necessary. If the business requires more complex financial management, it is advisable to hire an accountant. A bookkeeper is ideal if the business needs someone to record and keep track of financial transactions. Ultimately, the decision should be based on the size and scope of the business, as well as its financial requirements.
Yasso Bookkeeping Solutions is a company you can rely on for your financial needs. We help small businesses with bookkeeping, payroll, and taxes. Our team of experienced professionals offers personalized advice and accounting services in New York tailored to your business’s individual needs. Contact us today to learn more!