Bookkeepers : What Do They Do? Should You Hire One?
Every business needs to keep track of their financial records and when it comes to balancing the books more than one person often looks at them in order to balance them. Bookkeepers and accountants will look at the figures so that they can write up reports, but they both perform different functions. In the eyes of some, the terms bookkeeper and accountant are the same thing, but that is not the case.
Bookkeepers usually do not have the same schooling as accountants. Their degrees are often different and they have taken different classes. The actual recording duties for a business are often done by the bookkeepers. Once the figures are recorded in a ledger, they go on to the next. Their job usually does not consist of analysis and planning. That by no means that they are unqualified to perform advanced financial tasks, it is just not often asked of them. Most of the bookkeeping duties are on a monthly cycle, consisting of recording transactions, writing reports, and making minor adjustments.
The more advanced planning and analysis tasks are more often given to the accountants than to the bookkeepers. Accountants often create the bookkeeping processes for large businesses and then take on monitoring duties. The bookkeeping team enters the figures and creates reports which are then given to the accountants who analyze the numbers in order to plan future financial moves. Since accountants must have bookkeeping knowledge and skills, they are often the bookkeepers’ supervisors. The accountants look at the ledgers and calculate things such as new interest numbers and upcoming wages to be paid out to the employees. They create financial statements for the business based on the numbers.
Smaller businesses often employ a single person who performs the duties of bookkeepers and accountants. That is because bookkeeping is one aspect of accounting. If the small business does numbers low enough to be recorded and analyzed by one person, there is no need for a distinction. Some states, however, maintain regulations that are very specific to what financial duties one is allowed to perform. These states will permit only CPA’s to perform accounting tasks and provide businesses with the guidelines. In other areas, the distinction comes down to one of prestige. Because accounting requires more schooling and brings greater responsibility, it may concern some to hear a bookkeeper referred to as an accountant.
It may never be completely clear, especially with developing software, who does exactly what. Some bookkeepers end up performing accounting duties and vice versa. If that continues to be the case, some might be completely content in using the terms reciprocally, but those performing the job know the difference.
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Bookkeepers : What Do They Do? Should You Hire One? By house | September 17, 2010
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