“Do I need to work with a bookkeeper and an accountant? What’s the difference?”

This is a common question for new business owners, and even for those who’ve been in business a few years. So we’re glad you’ve found this post! CLEAN Bookkeeping is here to help clear up some of the differences and similarities for you, so you can better understand how bookkeeping and accounting can work together (and separately) to support your business goals. 

Bookkeeping and accounting play different roles in one common goal: ensuring you have the cash to keep your business running. 

What does a bookkeeper do?

A bookkeeper works with the details inside your business’s books, maintaining and recording all your financial transactions. The work involves systematically organizing every item and summarizing your original books of accounts — maintaining and recording payment of taxes, sales taxes, sales revenue, loans, interest income, payroll, and other operational expenses, investments, etc. The books of accounts need to be up-to-date and accurate — bookkeeping is at the foundation of your business’s financial wellbeing.

What does an accountant do?

An accountant, on the other hand, focuses on the bigger picture. Where a bookkeeper is focused on transactional work, providing administrative support for small business owners, accountants help with strategic decisions with a broader horizon. Accountants will utilize the reports generated by bookkeeping as part of the basis for the guidance they provide.

Bookkeeping and accounting are different, but they do go hand-in-hand. For the most part, bookkeeping is reactive, tracking things that have already happened (although we also work proactively to file reports and support your budgeting, etc). Accounting is largely proactive, working to anticipate and plan for future financial needs. 

Accountants also provide expert knowledge in financial laws, ethics, and risk assessment — like we said, big-picture.

Not everyone needs an accountant right off the bat when starting a business. However, EVERYONE needs accurate bookkeeping — whether you do it yourself, or you work with professional for either full-service or a la carte support. 

(For small business owners, nonprofits, and entrepreneurs who are just starting out, doing the books is often ends up on the to-do list of a team member; or for solopreneurs, the ONLY team member. Sometimes, business owners have the staff availability and experience to make bookkeeping an in-house task. Other times, it’s a time and energy investment better made by working with a pro.)

Bookkeepers typically charge a lower hourly rate than most accountants. So if you do have an accountant helping manage your business’s finances, having a bookkeeper do as much on your ledgers as possible before handing things off to the accounting firm to finalize will actually save you money.

Whatever your situation, managing a growing business means delegating some of the responsibilities that aren’t the best usage of your time — responsibilities which might include the day-to-day updating of your books. And just because your business is in the early stages of growth doesn’t mean you can’t tap into professional support at affordable rates. Outsourcing this role means paying a fraction of the price that you would for a full-time bookkeeper, but provides you with all the benefits of the subject-matter expertise. Unless you’re calling or emailing your bookkeeper or accountant multiple times a day, and you wish you had them in-office, outsourcing is almost definitely the way to go. 

No matter where you are in your business journey, if you have questions about what level of bookkeeping support is right for you, we’re here to help. 

Contact CLEAN Bookkeeping to set up your initial consultation — our first meeting is always free of charge.