This year due to the pandemic, many people are making some hard decisions on how to support themselves and their families. Many people are choosing to start businesses or are deciding to take their small businesses to the next level.
Bookkeepers and accountants share common roles, and they will support you for different accounting processes and functions. Business owners, you will need to know the difference between the two, and the significant cost savings you can reap by using virtual bookkeeping and accounting services!
Bookkeeping and accounting services are two integral pieces of the same puzzle. Where bookkeeping ends, accounting begins, and sometimes they might overlap a little, so below you will find descriptions of services that each offer.
What a bookkeeping service does
Bookkeeping services manage the day-to-day financial operations of a business. The best bookkeeping agencies will help you assess your needs and future goals and work with you to design a customized system that will help you achieve your financial goals.
Part of this process is helping you by creating a chart of accounts that will allocate income and expenditures to the proper accounts so you can run reports and know how much money has been expensed against each account and you will be able to track your financial activity.
They process financial transactions like sales, payroll, accounts receivable, and accounts payable. They will reconcile your checking and other business accounts and will help you create financial reports you will want to see on a weekly, monthly, and quarterly basis, depending on the nature of your business.
Cash flow management is essential when evaluating your company’s ability to meet financial obligations and these reports can help you explain the reasons between reported and related cash flows and will describe the effect on cash flow related to financing activities.
Trust accounting is important because there are many reporting requirements related to fund disbursement including operating income and expense, interest, dividends and royalties, taxes, rents, and depreciation.
In summary, a bookkeeping service maintains a general ledger, documenting all financial transactions related to your business.
What an accounting service does
Accountants take the information recorded by bookkeepers and will verify and analyze the data. Most people hire accountants when because their business taxes are becoming too complicated and time-consuming to handle without the help of a professional.
Accountants perform audits, prepare tax returns, and produce income statements and balance sheets. They will work with you to help you understand the implications of financial decisions. There are accountants and certified public accounts, or CPA’s. CPA’s are more knowledgeable about tax codes and will help you when facing an Internal Revenue Service audit.
As you can see, bookkeepers and accountants are two sides of the same coin. They are both interested in helping you manage and grow your business in fiscally responsible, and thoughtful ways.
EVA Business Solutions is ready to assist you with all your bookkeeping needs. To better serve our clients, we have partnered with the accounting firm of Tuthill & Shea Tax and Financial Services! This partnership allows for greater financial transparency between our two firms and creates a seamless flow between your tax and financial advisors and your bookkeeper. Call us today at (615) 461-7157.