Financial mismanagement is the primary reason half of all new small businesses fail in the first few years. Difficult to take, but startups and small businesses need to learn the crucial role a professional accountant and bookkeeper plays in business success.
Many startups and small business owners don’t know the difference between accounting and bookkeeping. They believe that both are the same thing. Understanding the difference is crucial to deciding whether you should opt for professional bookkeeping or accounting services.
Signs That You Need A Bookkeeping And Accounting Services
At a certain point after launching your business, you will need the help of a professional financial expert. You might be very good at business accounting but might not have the accuracy in documenting your profits and losses. Of course, there will be various other things only you can handle with utter responsibility.
When it comes to accounting and bookkeeping, you might find it tricky to weigh whether you need the services of a bookkeeper or an accountant.
Accountant or Bookkeeper: What’s the difference?
Bookkeeper: Employing bookkeeping services for a small business means having a person responsible for managing your books. The bookkeeper will not only maintain your financial records up-to-date but will also keep you informed about the status of your ongoing transactions. They will focus on income as well as expense transactions. Furthermore, the bookkeeper will also help you with other financial tasks such as invoicing, payroll, and more. Your bookkeeper will fundamentally focus on ensuring accurate financial data consistently. These services are crucial for the financial system. It allows you to draw the reports and pay the bills at the right time.
Accountant: Some small business accounting services are capable of handling the bookkeeping tasks, as mentioned earlier. Virtually, an accountant monitors the bookkeeper to ensure transactional information is accurate. An accountant’s responsibility may include billing, reconciliations, general ledger entry, and assessment of accounts payable activities. Your accountant will be more involved in handling cash flow, tax preparation, and other aspects of managing your business’s financial health, whereas, on the other hand, your bookkeeper will only focus primarily on the transactions within the accounts.
If you are looking for all of the above services, it would be worth hiring the team of professionals that can provide you with the best bookkeeping and accounting services. Read more
Employing an accountant or bookkeeper
As the most important person responsible for supervising all the aspects of the company’s operations, you will have lots on your plate. You don’t have to get caught up in those tricky daily jobs, like recording data and generating reports. However, employing professional bookkeeping and accounting services could be a great investment. Refusing to assign work to others can lead you to be a blockade that will hinder your business growth. Handling some vital responsibilities to others will allow you to have considerable time to handle other areas of your business you are best in throughout the week.
Outsourcing expert accounting and bookkeeping in Etobicoke might be one of the best investments for your business. A support team and a quality system is essential to maximize your time. Accounting and bookkeeping are the financial foundation. If handled appropriately, it ensures that everything in your company is running smoothly.
In-house personnel or outsourcing: What is the best?
If you feel the need to hire an accountant or a bookkeeper, you will most probably consider employing an additional in-house employee. Wait! Before appointing an additional head, think about the salary part you will be paying every month and other overhead expenses. Often, startups and small businesses don’t have the required resources to afford a full-time employee in the financial area. Being in the initial stage of growth doesn’t mean that you cannot enjoy the services of professional bookkeepers and accountants. Outsourcing is an ideal option to manage your monthly expenses and still gain the financial support your company needs.
When it comes to outsourcing, you might ask, what would be the cost of bookkeeping services for small businesses? Well, the cost can be just a fraction of the salary to full-time staff. Therefore, outsourcing professional services is a cost-effective way to enjoy the benefits of full-time in-house employees without any financial burden.
Stages that indicate that you need the services of a bookkeeper and accountant
The accounting and bookkeeping needs are minimal in the initial stages of a startup or a new business. However, it would help if you still opted for a reliable bookkeeper or accountant in this early stage to help you build a strong financial foundation for future growth. A good system will help you prevent growing pains and make it easier to expand.
You need expert help when:
1. Your financial data are to be kept private: Once your business starts making lots of money, a bookkeeper will make it easier to file taxes and protect your privacy. Software is vulnerable to hacking. However, it is good to opt for a bookkeeping service that you can trust to keep your financial information secure.
2. Your small business is expanding: The DIY method is possible if your business is small and doesn’t generate much revenue. But eventually, you will require further supplies and more intense bookkeeping. At this stage, you will need the help of a reliable bookkeeper.
3. It is tough to train and manage an in-house staff: Business owners often don’t have enough time to train an in-house team since many other areas need their involvement. Time is often a concern when it comes to hiring an in-house team. Instead of training new staff, opting for bookkeeping service may be more cost-effective.
4. You have to be focused on other areas in your business: Accounting and bookkeeping are time-consuming. These two tedious tasks can make it difficult to manage other areas of your business. Outsourcing or hiring bookkeepers and accountants allow you to concentrate more on the core duties of your business.
5. Smooth tax filing: Tax preparation is a complex process. But, a good bookkeeper can make your tax time easier than ever. They will maintain a detailed record of your financial transactions, including income, loss, and spending. This data is crucial to learn how much tax you owe and how many tax deductions you can take. Your bookkeeper will fundamentally prepare necessary tax documents for you. The only thing you need to do is check their work and sign the document; this will simplify your tax process.
Are you looking to hire a professional accountant and bookkeeper?
You will need the help of a reliable bookkeeper or accountant at some point. A good system can help you ease your financial duties. A bookkeeper will make your tax time less complicated and keep your financial information secure and up-to-date. It’s not necessary to spend hours learning about accounting software. Small business bookkeeping Etobicoke can help you manage your business.
