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In the intricate world of finance and business, there's a fine line between the roles of an accountant and a bookkeeper. In the world of business, numbers rule, and financial decisions can make or break your success. Maintaining accurate and organized financial records is important. It is the backbone of your company. Many entrepreneurs understand the significance of bookkeeping services. But a common misconception often leads them astray. The assumption is that their accountant can handle both bookkeeping and accounting tasks.
While accountants are renowned for their deep understanding of tax regulations and financial strategies. But relying on them for day-to-day bookkeeping tasks might not be the most effective approach. So, today let’s talk about why entrusting your bookkeeping responsibilities to your accountant may not be the best course of action. Let's learn as we explore why you shouldn't ask your accountant to do your bookkeeping.
Difference Between Bookkeeper and Accountant
A bookkeeper focuses on bookkeeping basics on the day-to-day recording of financial bookkeeping transactions, such as entering invoices, receipts, and payments into the accounting system. They ensure the accuracy and organization of financial records, perform bank reconciliations, and generate basic financial reports.
On the other hand, accountants are responsible for interpreting and analyzing financial data to provide insights and guidance to businesses. They prepare financial statements, conduct audits, and offer strategic financial advice. Accountants have a broader understanding of economic concepts and regulations, enabling them to provide valuable insights for decision-making and tax planning.
While outsourcing accounting to India handles the essential task of maintaining financial records, accountants bring higher expertise and analysis to help businesses navigate complex economic challenges. In this situation outsourcing bookkeeping to India can benefit your business.
Read More- How does outsourced bookkeeping work
Reasons Why You Shouldn’t Ask Your Accountant to do Your Bookkeeping
1. Your Accountants Don’t Know Your Business Details
The majority of business owners only consult with their accountants during the tax season. This limited interaction fails to provide a comprehensive understanding of your business's day-to-day operations and financial health. Your accountant focuses on essential tasks during tax season to gather the necessary figures. Like completing your tax filings, without reconciling all your accounts. If you’re completely relying on them for this process, you’re making a mistake. By trusting them, you would overlook valuable insights that your books can offer during tax time.
2. Your Accountant Will Not Be Focused on Little Things
A good bookkeeper will always make sure to be focused on little things. But an accountant may not catch every single dollar in your account. Their role is to examine the comprehensive financial landscape of your business. Understanding your bookkeeping and taxes obligation, and identifying opportunities to cut your tax liability through potential adjustments. To them, a penny here or there holds little significance, but when it comes to the financial performance of your business, it becomes crucial to track the whereabouts of those pennies.
Read To Know- 11 Common Bookkeeping Challenges For Small Businesses
3. Your Accountant Will Need A Separation From Numbers
Having an accountant provides several advantages. One of which is their ability to offer a fresh perspective on your financials at the end of the year. It is crucial to conduct an goal review of your books. Accountants can provide valuable insights into resource allocation. It enhances your business performance. But, when accountants are involved in managing your books, they may become too immersed in the company's financial data, overlooking significant trends. So, it is important to ensure that your accountant is delivering the strategic and financial analysis you need while keeping them separate from the bookkeeping process.
4. Accountants Come with Expensive Price Tag
Accountants can be quite costly. Each time they handle your tax fillings, you likely shell out a much amount. Now imagine, paying that amount every week or even every few days, when they’re busy reconciling your accounts. The hourly fees for an accountant are generally much higher compared to that of a bookkeeper. Though it is true that a bookkeeping consultant can manage your bookkeeping tasks more than you can. So, the accumulated hourly charges can be significant. Since bookkeeping involves intensive labor, opting to hire a bookkeeper will prove cheaper while still offering a similar level of expertise as your accountant.
To sum it up-
Entrusting your accountant with the task of bookkeeping may seem like a convenient solution, but it can lead to a host of issues down the road. Remember, bookkeeping requires specialized skills and attention to detail, which may not be the accountant's primary expertise. By outsourcing bookkeeping to a dedicated professional bookkeeper or utilizing modern accounting software, you can ensure accurate records, timely financial insights, and the freedom to focus on what you do best—growing your business. Don't let the allure of convenience compromise the financial health of your enterprise. Take charge of your bookkeeping, and watch your business thrive!