When it comes to starting or running a small business, bookkeeping and accounting are vital areas that need to be covered. However, many people don’t exactly know the difference between the two. We’re here to help you understand which is which, and how outsourcing either or both of your accounting and bookkeeping duties can be beneficial to your growing company.
How Are They Different?
The terms “bookkeeping” and “accounting” are often used interchangeably. In a general sense, that’s acceptable, but once you get literal, you soon realize the differences. In reality, accounting is a broader business term and a professional accountant (CPA) will generally offer a wider breadth of knowledge, experience and services. A bookkeeper, on the other hand, is the person who handles a key subset of accounting; they focus specifically on the record-keeping aspects.
A bookkeeper accumulates, organizes, stores and reports financial information. This ensures better day-to-day financial operations of the business. They’re also responsible for preparing financial statements, handling tax returns and distributing financial reports to the management staff.
Accounting, on the other hand, covers a bigger picture. An accountant designs and implements the bookkeeping system and establishes controls to keep the system running smoothly. They are also skilled at analyzing and verifying financial information to help the company make sound, financial decisions.
It’s Like Building a House
Think of it this way: The accountants are the architects and contractors rolled into one: laying out the plan, overseeing all the details and making key decisions and adjustments as needed. The bookkeepers are the builders themselves, executing the orders and doing all the hands-on work to ensure that the house is built as designed.
Just like you can’t build sturdy homes without architects, contractors and builders, it’s just as difficult to build a successful small business without having both the accounting and bookkeeping roles covered. This can be overwhelming to take on yourself without the necessary experience required to handle these important duties. Yet, hiring full-time accountants and bookkeepers can be beyond your operating budget.
Outsourcing Your Bookkeeping & Accounting Services
With Ferguson, Timar & Company, you can outsource your bookkeeping and accounting services to our professional team of experienced CPAs. You’ll get the advantage of our knowledge and expertise at a fraction of what it will cost you to hire a seasoned accountant or bookkeeper.
To learn more about Ferguson, Timar & Company’s professional accounting and bookkeeping systems, contact us today.