As an owner of your business, be it small or big, you will love to see your business growing every time. For that, you will need your financial data to be accurate and updated. So that it can help you to make wise business decisions and your cash flow remains smooth. But, with its growth, you have to deal with a greater cash flow and more number of people. Keeping track of that is indeed complex and time-consuming. To keep records, you may go for a number of options like a DIY approach or hiring an accountant or a bookkeeper. You can get a rough idea of the responsibilities of accountants and bookkeepers.
In Accountant Or Bookkeeper, What does an accountant generally do?
An accountant plays a number of roles in your business.
- Verification and analysis: The first and foremost thing an accountant does is to verify and analyse the data.
- Preparation of documents: After verification and analysis are done, the accountant will generate reports, perform audits and prepare financial reports which include tax returns, income statements and balance sheets.
An accountant can also give you invaluable advice on how to restrict your expenses to manage the cash flow of your business. To summarize, the accountant actually supervises the handling of different transactions.
An accountant can also do the job of a book-keeper. For that, you have to pay a greater amount of fees to the accountant that includes fees for keeping accounts and also book-keeping. While choosing an accountant, it is recommended to choose a certified public accountant.
In Accountant Or Bookkeeper, What does a bookkeeper do?
A book-keeper’s responsibilities vary depending on the size of a business and its unique necessities. In general, the book-keepers have to do the following duties in a business company.
- Maintaining records: The book-keepers have to maintain accurate records of all the financial transactions and related records.
- Handling day-to-day management: Besides maintaining records, the book-keepers must manage accounts on a daily basis.
- Ensuring compliance with legal obligations: The book-keepers have to check whether the business complies with the government laws.
- Managing bank feeds: Bank feed is a digital link that occurs between your bank account and accounting software and can import bank transactions to your software on a daily basis. A bookkeeper’s job is to manage these bank feeds.
- Handling accounts payable: In case there is no accountant, book-keepers have to handle the accounts that are payable.
- Sending invoices: Accountants may prepare the invoices which book-keepers can send to the right persons. At the same time, it is the book-keeper’s job to manage the accounts receivable.
- Processing payroll: Payroll is an utterly important thing because it covers a number of factors related to payment of an employee. Book-keepers should check whether the company complies with the payroll laws or not.
- Preparing books for the accountant: Big businesses hire accountant and book-keeper separately. Using all the records, book-keepers prepare the books for the accountants, which make accountants’ job of verification and analysis easier.
Just like an accountant, there are a number of benefits of hiring a book-keeper too. The most important service that you will get from an experienced book-keeper is that, chances of errors can be readily reduced. If not properly trained, even highly experienced book-keepers are also prone to make mistakes which can cost them heavily.
In Accountant Or Bookkeeper, While hiring a book-keeper, you should always look for certain qualities. You should first check whether your budget permits. Then you have to look for his/her tax and software experiences. In this era of digitalization, virtual book-keeper can be a feasible option. Xero bookkeeper Perth can come handy in case your business is based in Perth, Western Australia.
What are the pros and cons of DIY approach?
DIY approach stands for ‘do it yourself’? As the name suggests, you can clearly understand that, here you can do all the accounting and record-keeping activities all by yourself. However, there are some pros and cons of this approach.
Benefits to note
The most primary benefit of this approach is that, you do not have to pay a professional accountant or bookkeepers. it allows you to save a decent amount of money which you can use in other business purposes. You can easily go for DIY approach if you are really used to filing taxes and sorting documents using the necessary software. Another advantage of this approach is that, your business records will be kept private. No one can get access quite easily as it is you who are keeping records all by yourself.
Cons to watch out for
To be very honest, the cons are more than the pros when you do all the record keeping by yourself. You have to remember to keep tracks of all the records and receipts. This is hugely mind-tiring and time-consuming. It will take hours after hours to find and sort all the documents and uploading them. It can be worse if you make any mistake. On this note, making mistakes is another potential drawback of this approach which can lead to incorrect information on your taxes, giving rise to unwanted consequences.
Depending on your business size and nature of transaction, you have to choose the correct method. However, it is always advised to hire a professional because of its being more rational, rather than doing it yourself. To know more, you may consult with a professional accountant Perth.