How Can an Accountant Help Me With My Bookkeeping?

Hiring an Accountant or Bookkeeper? What You Need to Know

Bookkeeping is essential to the success of any business. It involves recording financial transactions, such as income and expenses, in order to track the performance of the business. An accountant can be a great help when it comes to bookkeeping, offering advice and guidance on the most effective methods of record keeping and tracking a business' financial performance.

Accountants can also provide assistance in preparing financial statements and balance sheets, analysing trends in the business, and making recommendations for improving financial performance. By understanding the data that is produced from bookkeeping and how this can be used to inform future strategy and decision-making, an accountant can help a business stay ahead of the competition.

What are the Types of Bookkeeping?

There are several different types of bookkeeping systems used by businesses today. These include the single entry bookkeeping system, double entry bookkeeping system, manual bookkeeping, and computerised bookkeeping.

In the single-entry bookkeeping system, all transactions are recorded in one set of books. This type of bookkeeping is generally suitable for smaller businesses or those with simpler financial needs.

The double-entry bookkeeping system records all transactions in two sets of books, ensuring the accuracy and accuracy of the records. This type of bookkeeping is more suitable for larger businesses with more complicated financial needs.

Manual bookkeeping requires a large amount of manual labour and can be quite time-consuming. Computerised bookkeeping uses software programs to record, store, and analyse financial data. This is the most efficient and cost-effective method of bookkeeping and is becoming more popular with businesses of all sizes.

Should I Hire an Accountant or a Bookkeeper?

The decision to hire an accountant or a bookkeeper will depend on the size and complexity of the business. Generally speaking, if the business is small and its finances are relatively straightforward, a bookkeeper may be sufficient to manage the bookkeeping. A bookkeeper can provide services such as entering financial data, reconciling accounts, and preparing reports and financial statements.

However, if the business is larger and has more intricate financial dealings, an accountant may be more suitable. An accountant can provide services like financial planning, tax planning, and budgeting, as well as provide advice on the best course of action for a business.

Do Bookkeepers Prepare Tax Returns?

Bookkeepers can assist in the preparation of tax returns, but ultimately these must be filed and submitted by an accountant. Accountants are qualified to advise on the potential financial implications of filing taxes and will review the return thoroughly to ensure that it is accurate and complete.

A bookkeeper can offer support and guidance, but they cannot take responsibility for preparing and filing a tax return. Therefore, if a business wishes to have its tax return prepared and filed, it should engage the services of an accountant.

Is a Bookkeeper Cheaper than an Accountant?

The cost of hiring a bookkeeper and an accountant can vary greatly depending on the size and complexity of the business. Generally, a bookkeeper will be cheaper than an accountant due to the differences in expertise and experience. Bookkeepers tend to focus primarily on recording and tracking day-to-day financial transactions, while accountants provide more of a strategic overview, advising on long-term financial plans and complex taxation issues.

However, when considering whether to hire a bookkeeper or an accountant, the key factor should be the level of expertise and advice that each can provide. An accountant’s greater experience and knowledge may be worth the higher price tag if their advice and insight can provide real value to the business.

Overall, when deciding between a bookkeeper and an accountant, it is important to consider the size and complexity of the business, the level of expertise and advice that is required, and the price that each professional charges. With the right combination of skills and qualifications, both a bookkeeper and an accountant can be invaluable to the success of a business.