Do I Need a Bookkeeper or an Accountant? Your Small Business Guide

What Does a Bookkeeper Do?

Imagine a bookkeeper as a super-organized friend who keeps track of all your money coming in and going out. They are like a daily diary for your business money. They make sure every dollar is recorded in the right place.

What Does an Accountant Do?

Think of an accountant as a smart money coach. They take the daily records from the bookkeeper and use them to help you make big money decisions. They can help you plan for the future and make sure you pay the right amount of taxes.

Bookkeeper Tasks: Day-to-Day Money Tracking

Bookkeepers handle the everyday money stuff. They keep your financial house in order. They make sure all your bills are paid and all your sales are recorded.

• Recording all money you spend (like buying supplies).
• Recording all money you earn (like selling your products).
• Sending bills to your customers.
• Making sure your bank account records match your business records (this is called reconciliation).
• Helping you know how much money you have right now.

Accountant Tasks: Big Picture Money Help

Accountants look at the bigger picture of your money. They use the bookkeeper's work to give you advice and help you plan. They are often needed once a year or for special money questions.

• Getting your taxes ready (this is a big one!).
• Helping you understand how your business is doing financially.
• Giving you advice on how to save money or make more money.
• Helping you plan for big purchases or investments.
• Making sure you follow all the money rules for businesses.

When Do You Need a Bookkeeper?

You probably need a bookkeeper right away when you start your business. This is because every business has money coming in and going out from day one. A bookkeeper helps you stay organized from the start, which makes tax time much easier. Most small businesses spend between $100 and $500 per month for a good bookkeeper, depending on how much work they have to do.

When Do You Need an Accountant?

You will most likely need an accountant when it's time to pay your taxes each year. They can also be helpful if you are thinking about big money changes, like getting a loan or selling your business. Some small businesses might talk to an accountant a few times a year, while others only need them once for taxes. Tax preparation for a small business can cost anywhere from $500 to $2,000 or more, depending on how complicated your taxes are.

Can One Person Be Both?

Sometimes, a person might do both bookkeeping and accounting tasks, especially in very small businesses. But usually, they are different jobs. Think of it like this: a bookkeeper is like a daily reporter, and an accountant is like a financial advisor using those reports.

Questions people ask