The only small business owners who really like bookkeeping are doing it for a living. Everyone else looks at doing the books, payroll and taxes as a necessary evil, most often done at night when it’s not possible to make calls to customers, oversee production or do any of the other million things that owners of small businesses have to do. Analyzing the numbers in order to strategically plan the future is important, but who has the knowledge or time to produce the reports or the experience to really understand what they mean?
Hiring a Bookkeeper isn’t Enough
Hiring an employee to do payroll or bookkeeping isn’t easy. If an employee’s paycheck isn’t right in any respect, they will be really unhappy and probably let everyone know about it. If all of the taxes aren’t paid on time or paid incorrectly, it won’t be the bookkeeper who has to deal with it. Even if the bookkeeper that was hired always does the payroll correctly and pays the taxes on time, does that person have the knowledge to give advice on tax-saving strategies, the best way to manage cash flow and other financial strategies that would really help to grow the business?
The Difference Between a Bookkeeper and an Accountant
Most inland empire bookkeepers are fine for handling the routine payroll and taxes, but bookkeeping services don’t normally take the time or have the desire to discuss the future of the company. Actually, that’s the job of an accountant, not a bookkeeper.
Record financial transactions chronologically
Prepare some financial reports with the assistance of bookkeeping/accounting software
Have limited education in financial matters or may even be self-taught
Interpret and analyze bookkeeping data
Prepare financial statements and projections
Prepare taxes and suggest tax-saving strategies
Assist business owners in making sound financial decisions
Have at least a bachelor’s degree
Have advanced education and training as a certified public accountant or enrolled agent.
A bookkeeper’s tasks are normally limited to recording financial data. Accountants can do everything that a bookkeeper does and may act as supervisors, but their education, training and expertise enable them to serve as advisers to the owners of a business. In brief, bookkeepers record while accountants analyze.
A Small Business Needs Both
One way or another, bookkeeping needs to be done. Many small business owners visit an inland empire accountant only when it’s time to submit their federal taxes. This may be the only time spent discussing any financial strategies for the future. More often, the time will be spent reviewing the tax form. The lack of a qualified financial partner is a severe handicap for the future of the organization.
Prospect Financial Solutions isn’t your typical bookkeeping or accounting firm. For one thing, they’re highly recommended by financial guru Dave Ramsey. Although they perform all of the tasks of a traditional accounting firm, their focus is on their client’s future. If you need a financial partner for your business, contact this Redlands Bookkeeping Service.