Those who hire either online bookkeepers or accountants oftentimes can’t tell the difference between the two. As a result, they often don’t get what they need. Bookkeepers are then expected to prepare income tax returns, while accountants may be stuck with menial record-keeping purposes. It’s the difference between getting your eyes operated on by an optometrist, after getting a prescription from an ophthalmologist.
Bottom line is both bookkeeping and accounting share the same goals — however, they make up separate stages of the financial cycle. As such, both the online bookkeeper and online accountant are important for different sets of work.
Online bookkeepers – Bookkeeping is basically what it says — keeping “books”. While bookkeepers can’t tell you which shelf you’ll find Emerson in, they’re perfectly adept at producing invoices and recording various financial transactions. They can also complete payrolls and post debits and credits. If you need to check your historical accounts and general ledgers, your online bookkeeper is the perfect person to call.
Online accountants – In this converging world, some functions of accountants have been absorbed by bookkeepers. However, accountants remain to be the “big guns” of the financial process — not because they are more “important”, but because they perform tasks on a much higher level. Basically, accountants make sense out of the data bookkeepers have gathered. They take care of financial models, too.
If you need to analyze your cost of operations, you won’t pore over the data your online bookkeepers have kept for you. You get in touch with your online accountant and have him do the analysis. While bookkeepers can give you your daily profits and losses, only accountants can soundly extrapolate from this data to make projections of future financial standing.
As mentioned, bookkeepers and accountants are two parts of a process. A bookkeeper’s work barely makes sense in the long run until an accountant processes it. On the other hand, an accountant will be useless without the data that bookkeepers have. Also, bookkeepers are usually overseen by accountants, which hints at the mutual relationship between the two.
Much like how an optometrist and ophthalmologist can jointly help you maintain good eyesight (provided you know which is which!), online bookkeepers and online accountants are both instrumental in leading your business to long-term financial success. Just make sure that you choose the right people to fill the mentioned positions.