So WHEN do you hire a bookkeeper? And WHEN do you hire an accountant? Aren’t they the same?
Entrepreneurs are by their very nature do-it-yourselfers. They tend to wear many hats…webdesign, marketing, branding, answering phones, social media management, appointment setting, providing services, bookkeeping and accounting. And the list goes on. It never stops. Add to the mix that most startups are bootstrapped, meaning that the business owner invests their own money to the venture, outsourcing becomes a harder proposition.
So what do you do when there just aren’t enough hours in the day? When you have doing too much yourself? When you can’t see straight? When you’ve forgotten why you started this business in the first place? You make plans to hire someone… anyone to shoulder some of the never-ending work with you! You hire your first employee or you outsource…
First, you need to determine this – Do you need a bookkeeper or an accountant? Most business owners think that they are the same but they really aren’t. The lines can be a little blurry because most people don’t really make the distinction between the “job titles”. I’m not much for titles but I’m going to help you out and define them anyway.
Simplistically, an accountant is an analyst… they look at the big picture by reviewing your financial statements (profit & loss, balance sheet, cash flow). Whereas, a bookkeeper is your details person…they are your day to day task master. They make sure that deadlines are met, bills are paid on time and customer are paying you. Just a minor difference.
So do you need a bookkeeper or an accountant? The answer is… you need both. It was kind of a trick question. The tasks and skills are different for each job… or hat 🙂
Now that you know you need both, the question remains – When do you hire a bookkeeper? My answer is it depends. As user-friendly as software packages like QuickBooks are, they do take some time to learn. So ultimately, It depends on you. It depends if you are willing and able to learn a new skill and it depends on the time you have available to dedicate to doing the day to day bookkeeping tasks. If you’re not going to learn the software and set aside time to be your business’ financial task master…then the time to hire a bookkeeper is yesterday!
When do you hire an accountant? Here again, it depends. But this time, it depends on how you look at the work of the accountant. For small businesses, an accountant can be somewhat of a coach for the business’ finances. Someone to help you interpret the financial statements and really pull of them what the numbers really mean. This is a skill that takes experience and expertise and not every accountant (or CPA) is accustomed to working with small businesses but having a “money coach” on your team of advisers can help you grow your business faster than going it alone. So depending on your view… the time to hire an accountant, in an advisory capacity… is now.
If you really want to blow your growth projections out of the water. If you really want to build a business. If you really want to work on your business, not in your business. If you really want to get back to what you started your business to do in the first place… you need a team of professionals around you to support you and support the growth of your dream. You need a task master (bookkeeper) and you need a money coach (accountant).
Being a solopreneur doesn’t have to mean going it solo!
Have questions? Have comments? Would love to hear them.
Joyce, this is a great article outlining the differences and the need for both a bookkeeper and an accountant.
Thanks for stopping by Kim. Glad you liked it and found it helpful.
I thought they were one in the same. Thanks for the clarification!
A lot of people do… happy to help.
I always say my Accountant holds me accountable for everything I do in my business….thank goodness for him!
there are some good (and even great) accountants out there. glad you found a gem.
Very interesting Joyce. Important to know the difference between the two to be able to do the best for the business. Thanks
I think knowing the difference is important because it shapes ones expectations. A lot of people expect accountant level service/expertise from bookkeepers and that’s not fair to the service provider or the client. Glad you found this useful.
Thanks for clarifying! We can so often forget to tend to the business side of our businesses!
the business side of business is definitely important!
Good information Joyce. I always thought they served different purposes, but nice to see it spelled out.
glad it helped. please let me know if you have additional questions.
Great information Joyce. Never really thought about the difference in the 2.
most outside of the ‘industry’ don’t think about it… glad you found it helpful.
How true – I do both and people are surprised about the offering a financial picture based on their numbers…. the books tell the story! great job!
the books definitely tell a story and paint a picture… and it takes a bit of skill to read that book. 🙂
Great Tip Joyce!
Great post Joyce. I love your information and how you make it easy to understand!!!
Thanks Kim… that’s my goal – making the big bad scary financial terms approachable and understandable. Business owners really need to understand this stuff. 🙂
Great post and good information! Thanks for sharing your tips with us.
you’re welcome… thanks for stopping by and taking the time to comment. Appreciate it, Anastasiya.
I love the part where you refer to an accountant as “a coach for your business’ finances”…what a lovely way to phrase that! Great explanation of the differences and why we need both!
‘coach’ is the en vogue term of the day but I think it’s really appropriate. glad this post helped you. 🙂
What a great blog post and such great clarification on what the difference is! Thanks for sharing! I feel like my mind isn’t so confused now! LOL
so very happy to hear that. Let me know if you have any other questions or how I can further help demystify business finances for you.
Love your perspective on this. Thanks too for defining the difference between an accountant and a bookkeeper!
happy to help. 🙂
Great information. I was not aware of the difference. Thanks for the information!
educating the masses and helping you get the numbers – one person at a time. that’s my goal… and looks like I’m one step closer. 🙂
Thanks for the tips! Just in time for tax season 🙂 Need to get ours done!
what are you waiting on. Let me know if you need help… we do taxes around here too. 🙂
GREAT info Joyce. This is something I needed to read, especially starting my own business. Thank you!
Frances… I’m so happy that you found this useful. There’s a ton of information here… feel free to browse the topics and please let me know if you have any questions… your question just might be the subject of our next blog post.
Great info! Many thanks!
you’re quite welcome. 🙂
Great article Joyce. Thanks for stating the importance of hiring an accountant and bookeeper and the difference between the two. Very helpful information. Thanks for sharing!:-)
it’s what I do Edmund… thanks for stopping by. I’m so glad that this bit of information was helpful… 🙂
Hi, I’m an online entrepreneur running a reselling business as a student in college and I’ve recently reached the point where my profits have been increasing to the point where managing many of the tasks you mentioned in the first paragraph are becoming increasingly difficult to perform in a days time by one person. I’d like to hire an accountant to help manage inventory and sales financially however I have never hired anyone before and would not even know where to start as far as pay goes. If anyone has any advice for me, please let me know, thank you.
Hi Usman… fantastic news to hear that your business is growing. I do have a few blog posts here that you may find helpful for hiring and what to ask. http://www.thecommoncents.com/blog/2008/07/10-questions-you-should-ask-before-hiring-a-bookkeeperaccountant/
If you have additional questions, feel free to shoot me a quick message via the contact us page.
Great article Joyce, thanks. Just realized that I didn’t totally understand the difference in an accountant and a bookkeeper. I’m always happy to hear about ways I can lighten my load!
great… I’m glad that you found it helpful.