Do you need a bookkeeper or an accountant?

accounting

Choosing between a bookkeeper in Melbourne, or an accountant for your business can be hard. This is because so many people don’t really know the difference between a bookkeeper and an accountant.  Some don’t even know that there is a difference. However, the facts are that there’s a big difference between a bookkeeper and an accountant. To be able to choose the right one for your business, you need to know the difference.

What is a bookkeeper exactly?

When you’re hiring a bookkeeper in Melbourne, then you need to know that a bookkeeper is all about the daily financial running of a company.

A bookkeeper sometimes doesn’t have any qualifications, but they have all the experience needed to make sure that the everyday running of a business is going according to plan. They are responsible for all the purchases, the receipts, sales and payments.

They are doing all these things by making use of a logger or a journal. With the new technology, they are also now using computer software for this job. Software likes QuickBooks or Peachtree among the most famous computer software that bookkeepers are using. More details here.

What are the duties of an accountant?

An accountant is responsible for more than just doing the books and keeping the administrative tasks up to date. The main difference between an accountant and a bookkeeper in Melbourne is the fact that an accountant has a diploma or a degree, while most bookkeepers don’t have any formal qualifications.

The responsibilities of an accountant include:

  • Is to verify all data that’s entered on the computer;
  • Analyze the accounts, ensuring that everything is up to date, and paid for.
  • Perform audits and prepare financial statements for shareholders.
  • They file tax returns and make sure that the tax returns are filed on time.
  • They are responsible for all financial aspects and need to make sure that the money is spent wisely and not been wasted.

Do your business need a bookkeeper or an accountant?

Now, that you know the difference between a bookkeeper and an accountant, you need to know if you’re needing a bookkeeper or should you make use of an accountant.

The first thing that you should be aware of, before hiring an accountant, is that their salaries are much higher than a bookkeeper. This is because they have more responsibilities and they have qualifications and experience. If you’re business is still new and still growing, you might want to hire a bookkeeper in Melbourne instead of an accountant. Hiring an accountant is important for larger companies and companies that have the money for the higher salary of an accountant.

It is important to know the difference between an accountant and a bookkeeper, before you hire one of these two. You can’t hire a bookkeeper if you’re actually looking for someone that will be able to handle all the financial aspects of the business. However, it might be best to hire a company like bookkeeperco.com.au, if you’re still a growing business, looking for cheaper ways of bookkeeping, that will still provide you everything that you will need to keep your books and financial needs updated.

Some Benefits of accurate Bookkeeping Accounts

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Bookkeeper task

There are numerous reasons why keeping accurate accounts using bookkeepers will benefit your business.

Making Informed Decisions

Firstly, working with bookkeepers on your accounts will also help you make informed decisions about any issue. If you maintain your bookkeeping processes and completed them on a weekly basis then BAS returns, budgets, end of year financial statements and your tax return can be completed more efficiently.

Identifying Problems

Bookkeeping using your favorite software will help you identify any key problem areas especially as your accounts will be up to date. The reason for this is that you can regularly and more accurately be informed. You may have never thought about it but by keeping your books up to date by hiring a bookkeeper you could potentially save money. In fact it’s pretty much guaranteed as you will now be able to spot any insufficiency that may cause financial problems. For example, you could notice that your most recent marketing plan was not having the desired effect. You would then stop this particular campaign before you wasted any more money and change direction, maybe utilizing your marketing budget on something more productive. Ultimately you will have more time to promote your core business growth rather than wasting it following endeavors that are not working,

When tax time arrives you want to make sure that your business is able to deduct all expenses in order to reduce payable taxes. If your accounts are incomplete or not ready this may cost your business more in the long run. Moreover, it’s always great to have your taxes in order so you know exactly what your net profits are. This is where hiring a bookkeeper will come in handy

Business Expansion

When you want to expand your business banks will typically look for clean and up to date financial statements before making a lending decision. When you provide timely reports, all financial institutions will help and be better inclined to help your business with additional credit or increasing loans. By having regular re conciliation’s and engaging a bookkeeper to manage your books, your business will be seen by the bank with more credibility, when additional funds are required.

With accurate books, you will have a clearer picture of your business so you can make projections for future expenses and future income and also for upcoming project, and that is the way to give your business the right direction toward increasing growth. A business budget will help your management team to spot problem hotspots or even business wins and areas of growth that you can extrapolate on.

Cash Flow Projections

Furthermore, when managing your business you will need to focus on generations some cash activities, as cash is not equivalent to any accounting profit. By focusing on actual cash flow projections, it can provide an accurate indication of your business being able to meet short term obligations. When reviewing regular reports from debtors, you will be given a more accurate position of how quickly your clients pay you and you will be able to identify areas for improvement.

Bookkeeper task

To conclude, bookkeeping is essential for your business to develop for many reasons. Regular assessments and cash flow projection could in turn lead to business expansion. If you are looking for a bookkeeper then why not check out Bookkeeperco.com.au. They can help with your inventory management, payable accounts, receivable accounts, payroll and much more.