There can be confusion among small business owners when it comes to responsibilities between bookkeepers and accountants. There are some who believe that they will save money by using the services of a professional bookkeeper rather than services of a Certified Public Account (CPA.) I answer that question with this analogy: would you ask a nurse to perform open heart surgery, or would you ask a heart surgeon? Both are critical to the field of medicine just as the bookkeeper and the CPA are both critical to the field of accountancy. Let me point out a few important differences.
CERTIFIED PUBLIC ACCOUNTANT
A public accountant is qualified to help you strategize and make important decisions so that you can grow your business and avoid some common pitfalls. A CPA can also help you with strategic tax planning. Your CPA takes your business financial planning to the next level. If you don’t currently have a CPA, get one.
The bookkeeper then implements at the nuts and bolts level the strategy you and your accountant develop. Your bookkeeper will set up your books and classify transactions that correspond to your business strategy. At the most basic level, your bookkeeper spends a great deal of time posting transactions to the correct accounts so that your financial reports correctly reflect the financial health of your business. Other important functions include maintaining reconciled book balances and managing your accounts payable and accounts receivable. Your bookkeeper must be able to provide you with your current cash position when you are faced with a critical financial decision. I’ve just scratched the surface.
These are your most basic differences. But as with all things, bookkeeping professionals have different skill sets and areas of proficiency. There are many professional bookkeepers who are trained and skilled to help you in many other areas. These might include budgeting, forecasting, pricing, payroll, training, and so on. So what should you do? Your business is your ship and you are its captain. You should make a list of skills and assistance you are looking for in a bookkeeper and look for someone with those skills. A good place to start is by asking for referrals from similar businesses or from your accountant. Schedule a meeting with the Alexandria Small Business Development Center; they have professionals available to advise you. If you have an in-house bookkeeper, make sure your bookkeeper gets the training she/he needs. If you are a start-up, meet with your accountant on a periodic basis to be sure you are on track and give your bookkeeper feedback. Bad bookkeeping means poor output which can mean insufficient data for you to use when making critical financial decisions. Don’t be penny wise and pound foolish, as the old saying goes. The little you may save today may cost you plenty in the future. Be smart and get professional advice. It doesn’t matter if you keep your own books, if you staff it, or if you outsource… Be Smart!
Sue McLaughlin is the founder and principal of McLaughlin Bookkeeping Services, LLC and MBS Bookkeeping Seminars. Her mission is to offer small-business clients a fair price for bookkeeping services while delivering excellent customer service.