Most business owners are focused on tackling the growth and management of their business. They tend to spend time on defining a vision, identifying strategy and implementing steps to increase sales, drive growth and enhance profitability. Additional time is often focused on customer service, new product/service innovation, marketing, and human resources management. This often leaves little opportunity to review the company’s bookkeeping and internal accounting processes often going unnoticed until an issue or problem arises. When they do there is often confusion about how it happened because the company accountant was thought to be handling it. Although issues can develop for various reasons, it’s important to understand there are distinct differences between accountants and bookkeepers and their roles and responsibilities in the process. Since most are unfamiliar with the accounting process it’s not surprising the confusion exists and misunderstanding about how to solve issues. To help clients, prospects and others understand the differences and how to leverage the expertise of each, Keep has provided a summary of the key information below.
What is the Role of a Bookkeeper?
They are the financial expert responsible for recording the day-to-day transactions and other essential financial data reflecting activities within the company. They are responsible for ensuring all financial information contained in the company’s accounting software is accurate and up-to-date. Depending on the company a bookkeeper may be responsible for processing invoices, managing payroll, reconciling accounts at month, quarter and other period-end timeframes, as well as, preparing monthly financial statements). In summary, their role is to record all of the financial transactions of the business. They also are responsible for the performance of reconciliations as well as management of other critical financial information relevant to the business.
What is the Role of a Tax Accountant?
The tax accountant, typically part of a CPA firm, is the expert who helps the business take the financial information prepared by the bookkeeper and analyze it for tax reporting to the IRS. Depending on the needs of the company, they are often responsible for tax advice, planning, and compliance, as well as identifying potential tax write-offs and other profit maximization ideas. In summary, the role of the tax accountant is to take the company’s books (managed by the bookkeeper) and analyze the information for tax compliance and other reporting/analytical purposes.