One question that can pop up when it comes to starting a new small business is the need for someone to help with finances. Knowing whether you need a bookkeeper or an accountant to help you with your finances is something that most people are likely to consider at some point in their business journey.

But how do you know which is best for you and your small business? An accountant and a bookkeeper both perform different roles in the same sector. It is crucial that you understand what each profession takes care of before deciding if you need one or even both parties to help you with the financial aspects of running your new small business.

What does a bookkeeper do?

According to accountantcosts.co.uk a bookkeeper's role is to process all the financial information for your company into a software system to help you keep up to date records. This is so all your records can be held safely and kept up to date at all times.

All small companies will produce invoices, receipts, and expense claims. A bookkeeper will input all of this data and make sure all your financial transactions are kept up to date. This will give you orderly information when it comes to filing tax returns. Some bookkeepers may help you file self-assessment tax returns, but this service isn't something that is offered by all bookkeepers.

Generally speaking, most bookkeepers tend to be self-employed or can be employed by your company, and they may not be as fluent or well versed in financial knowledge to the same extent that an accountant would be. This is partly due to the fact that bookkeepers don't have to be qualified, but most do tend to have some qualifications and training and usually come with a background in booking work before branching out as self-employed.

What does an accountant do?

The main difference between accountants and bookkeepers is the types of tasks each performs as well the knowledge and qualifications each position holds.

Accountants will have more in-depth knowledge of the financial implications for small businesses and will have trained thoroughly in this area and have had to pass an exam to qualify.

Enlisting the help of an accountant will give you access to help with filing VAT Returns, Corporation Tax, Capital Gains Tax, and more complex self-assessment tax returns amongst others. Accountants will be able to provide you with financial advice as well as filing all your financial information on time and helping you with projected cash flow forecasts and business plans.

A good accountant will be able to help you with regular tax planning and personal tax liabilities as well as help you out with advice to help you maintain your company's financial standing and future plans for expansion and diversion.

Before deciding on hiring a bookkeeper or an accountant, it is essential you know exactly what tasks you will need to be taken care of so you are confident you're hiring the right person to look after your company's finances. A good accountant will generally cost more than a bookkeeper so bear this in mind when choosing!

Author's Bio: 

Blogger