In life, we all have to make choices – in fact, we make big and small decisions every day! But perhaps one of the biggest decisions we will ever make – especially if we are operating a business – is whether to go for an accountant or simply hire a bookkeeper. As you may well know, although an accountant and bookkeeper can pretty much do the same thing, there are services that only a qualified accountant can do – such as give you advice on your taxes or create a budget for you. So the question is, which services do you really need? Here are some top considerations to help you choose between hiring an accountant and hiring a bookkeeper.
What are the fundamental roles of accountants and bookkeepers?
It is worth knowing what accountants and bookkeepers can really do. First, accountants and bookkeepers play distinct roles in managing your finances. For instance, bookkeepers record financial transactions such as purchases, payments, and sales. They ensure that your financial statements are up-to-date and accurate. They often use accounting software and may also deal with payroll and tax preparation tasks.
Meanwhile, accountants provide a higher level of financial analysis and advice. They make use of financial data provided by bookkeepers to prepare financial reports, analyse your business’ performance, and provide strategic advice to help your business grow. As mentioned, accountants can even provide tax planning and regulatory and legal compliance advice.
- Assess the needs of your business
According to London-based accountants and central London accountants like GSM Accountants, assessing your business needs is important when deciding between an accountant and a bookkeeper. For example, a bookkeeper may be sufficient if you only need someone to manage basic financial tasks (like recording transactions and generating financial statements). However, if you require more in-depth financial advice or analysis of growth strategies, an accountant may be a better fit for your business.
Also, consider your business size and complexity. Small businesses with fewer transactions may be able to manage their finances with a bookkeeper, while larger businesses with more complex financial needs may require the services of an accountant.
- Cost considerations
As we very well know, cost is another important factor that influences whether we choose an accountant or a bookkeeper. In general, bookkeepers are less expensive than accountants. This is because bookkeeping is a more straightforward task that requires less expertise and education. However, the cost of a bookkeeper can vary based on the complexity of your financial needs and the level of experience of the bookkeeper.
Accountants are usually more expensive than bookkeepers; they have a higher level of education and expertise, for instance. However, the cost of an accountant can also vary depending on the services you require and the size (and complexity) of your business.
In some cases, hiring both an accountant and a bookkeeper is in your best interest. The bookkeeper can handle the day-to-day financial tasks, while the accountant can provide higher-level analysis and advice. With this approach, you can ensure that your financial requirements are met while controlling costs.
Choosing the right professional
Once you’ve decided whether you need an accountant, bookkeeper, or both, choosing the right professional for the job is important. Think about their experience, expertise, and certifications. Look for professionals with experience working with businesses similar to yours and with a track record of providing high-quality services.