As a business owner, you must know why you need clear and more accurate books, ideally those that you update on a monthly basis. Just the thought of having good books is not enough. You need to have an action plan to get there. This means you will need to find and work with the right people to help you achieve this goal. Another important decision you will make is choosing between hiring a bookkeeper or a year-end accountant. Although both professionals can provide valuable services, they perform very different roles. This article will clarify what both can do and why you need both.
What Does a Bookkeeper Do?
A bookkeeper's primary responsibility is to maintain your business's day-to-day financial records. This includes recording transactions, preparing invoices, and tracking receipts. A bookkeeper must not be certified but must have experience working with accounting software and bookkeeping principles. You should also read about Bookkeeping Secrets Every Freelancer Needs to Know.
What Does a Year-End Accountant Do?
A year-end accountant is a certified professional who prepares tax returns and financial statements. Unlike a bookkeeper, a year-end accountant is not a part of the day-to-day financial operations of your business. They are only brought in at the end of the year to review your books and prepare required tax filings.
3 Reasons Why You Should Hire Separate Bookkeepers and Year-End Accountants
1. Having an Extra Set of Eyes Helps Prevent Errors and Fraud
Bookkeeping is a complex and detail-oriented task. Even the most experienced bookkeepers can make mistakes. By working with a separate year-end accountant, you can be confident that someone else is reviewing your books and catching errors that may have been missed. In addition to preventing mistakes, having a second set of eyes can help deter fraud. If your bookkeeper handles your day-to-day finances and year-end accounting, they could be tempted to fudge the numbers in their favour. By working with a separate year-end accountant, you can reduce the risk of fraud and ensure that your financial statements are accurate.
2. Tax Accountants Specialize in Year-End, Not Day-to-Day Financial Activities
Taxes are one of the most complex aspects of running a business. They can be time-consuming and confusing, even for experienced business owners. That's why working with a tax accountant specializing in year-end tax preparation is important. While your bookkeeper can handle your day-to-day finances, they likely don't have the expertise to prepare your taxes. A tax accountant can ensure you take advantage of all the deductions and credits you are entitled to. They can help you plan for future tax liabilities so that you are not caught off guard at the end of the year.
3. Bookkeepers Can Provide More Consistent Service
One of the biggest advantages of working with a bookkeeper is that they can provide more consistent service. Because they are not involved in the year-end accounting process, they can focus on keeping your books up-to-date monthly. It will help them better understand your financial situation and help you make more informed decisions about your business. Hiring a separate bookkeeper and year-end accountant may seem like an unnecessary expense. However, the benefits of having two sets of eyes on your finances far outweigh the cost. Working with separate professionals will help prevent errors, deter fraud, and provide consistent service. Ultimately, this will save you time, money, and peace of mind.
Final Thoughts
We hope this article has clarified the difference between bookkeepers and year-end accountants. While both professionals can provide valuable services, they play very different roles. If you are considering hiring either one, be sure to understand what they can do and their limitations. Do you have experience working with a bookkeeper or year-end accountant from a trusted accounting firm? Are you looking for a qualified and experienced accountant to help with your business finances in Mississauga? GTA Accounting Bookkeeping and Tax Accountancy Services are here to help. We have years of experience helping businesses just like yours. We can provide you with the expert advice and support you need to make informed financial decisions for your business. Our team of certified tax accountants can take care of all your bookkeeping, accounting, and tax needs. We will work with you to create a custom solution that meets your specific needs. Contact us today for a free consultation!