As an accounting firm, we often field calls from prospective clients searching for bookkeeping services. Our team understands why these two financial disciplines are lumped together, but bookkeepers and accountants have different responsibilities. Understanding what those are can help you make better financial decisions for your company.
Each of these financial professionals has a defined role in the flow and delivery of financial information. Bookkeepers compile it. Accountants break it down and analyze it. We’ll get into that in more detail in this article. We’ll also provide some tips on how to make that data flow more seamless by building synergy and using the right technology.
Some companies choose to keep their bookkeeping in-house rather than outsource to third-party providers. That’s okay if you know what you’re doing. It can be a nightmare for your accountant if you don’t. We recommend setting up QuickBooks and taking advantage of the free training provided by Intuit. Call us if you have questions about that.
Certifications and Educational Requirements
To become a certified public accountant (CPA) in Wisconsin, you need a bachelor’s degree, 150 semester hours of college coursework, and 12 months of accounting experience. AIPB-certified bookkeepers need to pass an exam and complete 3,000 hours working in the field. A college-level education in accounting is recommended, but not required.
As a small business owner, you should never hire a financial professional until you check their credentials and references. Verifying their certification tells you they can legally do business in the field they’re claiming expertise in. References provide insight into how well they do their jobs. Be vigilant about this. Finance is an area where due diligence must be thorough.
Another distinction to be aware of is the difference between a CPA and a certified tax preparer. They can both do your taxes for you, but a CPA can provide more in-depth services like tax planning, forensic audits, forecasting financial outcomes, and the preparation of financial statements, budgets, and expense reports. Tax preparers don’t do any of that.
Defining Roles and Responsibilities
Successful business owners know how to delegate tasks and eliminate redundancies. That can be difficult without first defining roles and responsibilities. On the surface, it may seem that there’s an overlap between the duties of your bookkeeper and the services provided by your accountant. That confusion can be costly in more ways than one.
The simplest way to look at this is that the bookkeeper records your financial transaction data, and the accountant interprets and presents it as financial statements, tax filings, quarterly reports, or spreadsheets for planning and analytics. Metaphorically, you could say that the bookkeeper fills the car up with gas so the accountant can drive it.
Don’t misinterpret that as us downplaying the role of bookkeepers in any way. Accountants are dependent upon our brothers and sisters in the bookkeeping world to provide us with accurate numbers that help us best service our clients. If those numbers aren’t correct, small business owners could be subject to fines, penalties, or even criminal prosecution.
Building Synergy with Trust and Communication
Synergy becomes possible once roles and responsibilities are defined. The next step is to set up open lines of communication between your bookkeeper and your accountant. These are the two people you trust and pay to keep your company finances in order. They should be speaking with each other frequently. The more they do that, the better the data flow.
You do not need to be part of every conversation between your bookkeeper and your accountant. Allow the two individuals or teams to work together and report back to you when they have something relevant to discuss. Small business owners who try to insert themselves into that process often do more harm than good. Delegate and have faith in your people.
A key element for building synergy is perception. If an in-house bookkeeper is told that an outside accounting firm is “too expensive,” they’ll have a hostile attitude toward them. The same condition may develop if the owner speaks poorly about the bookkeeper when meeting with the accountant. Neither of these scenarios is good for your company.
The Benefits of Seamless Data Flow
The accuracy of the data going from your bookkeeper to your accountant is critical to the financial well-being of your business. The flow of that data is equally important. Paper documents in manila file folders are obsolete and not as secure as you think they are. Synched software and digital delivery are the tools used in today’s business world.
We mentioned QuickBooks in the opening paragraph. They’re not the only bookkeeping software out there, but they do offer some of the best features for connecting with your accountant. To start with, you don’t need to do anything except invite us in. That gives our team access to your bookkeeping records so we can do our thing.
Small business owners can try QuickBooks Online for free for thirty days. You’ll find similar offers from providers like Zoho and FreshBooks, but QuickBooks is part of the Intuit family of financial tools that also includes TurboTax, Credit Karma, and Mailchimp. In the United States alone, QuickBooks has nearly 120,000 paying customers.
Bookkeeper, Accountant, or Both?
It’s hard to be profitable in this business climate without a good accountant. Tax laws change every year. Your company should have strategies in place to adjust to them. A CPA can help you navigate those waters and make sure your company is tax-efficient. You’ll also find that we can help with financial planning and investing actions like tax-loss harvesting. A bookkeeper is equally important to a small business. Someone needs to record the data that the accountant uses to file taxes and prepare financial reports. Connect that person to your accountant, build some synergy through trust and communication, and use the technology that gives you seamless data flow. Call us if you need help with any of this.
