Accounting – 1.1 The purpose of accounting | e-Consult

Both bookkeepers and accountants offer valuable services to businesses, but their expertise is suited to different needs. Hiring a bookkeeper is most beneficial for businesses that require accurate and timely recording of financial transactions. This is particularly useful for startups and small businesses that are still developing their financial systems. Benefits of hiring a bookkeeper include:

• Ensuring accurate and up-to-date financial records.
• Maintaining organised financial data.
• Preparing regular financial reports (e.g., income statements, balance sheets) for internal use.
• Reducing the risk of errors in financial record-keeping.
• Freeing up the business owner's time to focus on core business activities.

Hiring an accountant is more appropriate for businesses that require financial advice, tax planning, and more complex financial reporting. Benefits of hiring an accountant include:

• Preparing and submitting tax returns.
• Providing financial advice and planning.
• Preparing complex financial statements for stakeholders (e.g., investors, lenders).
• Assisting with budgeting and forecasting.
• Ensuring compliance with accounting standards and regulations.
• Conducting financial analysis to identify areas for improvement.

In summary, if a business primarily needs help with the day-to-day recording of transactions, a bookkeeper is the better choice. If the business needs strategic financial advice and complex reporting, an accountant is more appropriate. Many businesses benefit from using both services – a bookkeeper for routine tasks and an accountant for more strategic financial planning.