Does My Business Need an Online Accountant or Bookkeeper?
Tax season is upon us, which makes it even more important to have your business’ finances in full, working order. Numbers will start piling up before you know it, and it can get overwhelming quite fast...but don’t worry. This is where your very own professional comes in! Online accountants and bookkeepers specialize in this sort of thing and are much simpler and more cost effective than hiring someone in-house.
You may know your industry and your business inside and out, but you never truly know your business until you understand all the numbers. An online accountant or bookkeeper will help with this, but the first question to answer is what really is the difference between the two?
Difference Between Accountants & Bookkeepers
The line between accountants and bookkeepers can be unclear at times, but a lot of the differences lie within the job specifics, education and background. A bookkeeper’s job is all about accuracy and being as efficient as possible. Many of their day-to-day operations include comprising financial statements, tax returns, and filing reports to be prepared for the business manager.
Bookkeepers are also typically responsible for processing payroll, keeping track of all financial transactions, and filing invoices. A bookkeeper is someone who can be looked at as the backbone of your business’ financial infrastructure. They keep things in working order and make sure all of your business’ basic financial information is easily accessible, organized and factually correct.
Your online accountant can be viewed as a more advanced bookkeeper. Accountants are often required to have a degree in either accounting or a related financial field, and oftentimes they are required to have certified public accountant (CPA) certification, which entails passing a multitude of challenging tests and examinations.
Accountants design the internal controls for all bookkeeping systems. Your accountant is responsible for a lot of similar things that a bookkeeper would do, while also being responsible for conducting full audits of your business’ financial history, while also making sure to detect any possible fraud or theft.
In the end, their bottom line goal is one that might be of most importance to your business - measuring your business’ profits.
The benefits of a outsourcing online accountant or bookkeeper as opposed to hiring an in-house accountant are seemingly endless.
An all-inclusive team such as the one provided by Basis 365 covers any needs you may have for a much more affordable price. You’d also be hiring a team with a wider range of knowledge than one person might typically have. One accountant is out sick? No worries...that’s why they have teammates!
You can find an even deeper breakdown concerning the benefits of outsourced accounting with a team like Basis 365 vs. hiring an in-house accountant here.
Which One Does My Business Need?
If you evaluate your decision based on the fact that an accountant is often a more advanced (and more expensive) bookkeeper, you will make the right choice. This does not mean that a young, thriving business should skip the accounting altogether, but every instance is unique. You may feel that you are capable of handling the financials all on your own, which is also fine.
Initially, it is advisable to have a strong accounting plan in place early on. Take a note of this great piece from AccountingToday.com, highlighting the importance of having strong accounting services in place early in the process.
“An accountant can help you determine the most appropriate business structure, analyze your business plan for financial compatibility, and assist with making sound financial decisions throughout the startup process so you don’t have to spend more money to correct mistakes later,” said King.
Another reason to go with an accountant would be if you took out a business loan and your lender requires that you submit formal financial statements. You will also have a higher chance of getting approved for a business loan if you have an accountant prepare a financial statement prior to even approaching the lender.
On the other hand, if your business is making less than $1 million per year in revenue, it is often advantageous to hire a part-time bookkeeper to handle a lot of your finances. Without more money at your disposal, it isn’t always the strongest move to allocate so much of it towards paying an accountant.
Of course, it doesn’t hurt to have both! This is where Basis365 can help you out. Having a comprehensive online accountant and bookkeeper all in one package gives you the best of both worlds, without the price or volatility.