| As a startup business grows into a small business, | | | | these tasks off to lower paid employees. |
| it is common for the accounting duties to | | | | Who does the Tax Preparation? |
| overwhelm the business owner. This is generally | | | | While many accountants offer tax preparation |
| the time that a search begins for some help. But | | | | services, it has developed into its own specialty. |
| does your business need a bookkeeper or an | | | | There are people that do tax preparation but are |
| accountant? While some job tasks may overlap | | | | neither bookkeepers nor accountants. The person |
| the two jobs are defined differently. | | | | that does the tax work for your business should |
| What is a Bookkeeper? | | | | be left to someone who specializes in this work |
| A bookkeeper handles the mechanical functions of | | | | because there are so many new laws that go |
| maintaining accounting records. They follow a | | | | into effect each year. |
| regimented monthly schedule and enter all | | | | A Hybrid Approach |
| transactions into subsidiary ledgers. These | | | | Most small businesses can't afford to add on an |
| functions are broken down into accounts | | | | accountant to do the work of a bookkeeper. But |
| receivable, accounts payable and payroll in larger | | | | unless the owner is familiar with accounting they |
| companies. It would be ideal to have each function | | | | are not able to perform the tasks of an |
| separated between employees for security | | | | accountant themselves. A good approach is the |
| reasons. However, for smaller companies one | | | | hybrid of both. The company will hire a |
| bookkeeper might perform all of these functions. | | | | bookkeeper for day to day tasks and then |
| A person who does all of the bookkeeping as well | | | | outsource the accounting work to an accounting |
| as preparing the monthly financial statements is | | | | firm. They may be CPAs or just experienced in |
| called a full charge bookkeeper. | | | | small businesses. The accounting firm performs |
| What is an Accountant? | | | | the monthly reconciliations and audits the books |
| Accountants are less involved in the day to day | | | | for errors or fraud. |
| tasks of entering transactions but take a higher | | | | The most important thing for any business is to |
| level look at the business. They compile the | | | | make sure the work is done. A business that |
| subsidiary ledgers into the general ledgers. They | | | | does not maintain good accounting records is |
| design and prepare reports that are useful in | | | | doomed to make uniformed decisions or miss |
| helping managers make informed decisions about | | | | opportunity to improve their bottom line. They |
| the business. An accountant can do all the work | | | | can also prevent unwelcome trouble from state |
| of the bookkeeper but they normally delegate | | | | and federal tax authorities. |