I know you've asked this before, what really is the difference between an accountant and a bookkeeper? And how can they help you in your online business?
I get this asked this question a lot because it can be hard to understand what the real difference is between an accountant and a bookkeeper.
Your business should have both an accountant and a bookkeeper and here's why you need both.
What is a bookkeeper in relation to your online business?
Your bookkeeper is the person that is there for you all month long to help you with your business finances.
Your bookkeeper is in your finances with you to help you make sure that your books are accurate. If your bookkeeping is not done on a regular basis and accurate, your taxes can't be filed on a timely basis.
The best way to ensure that your business is profitable throughout the year is to have your bookkeeping done regularly.
In my experience, most bookkeepers know the basics of the tax laws and this helps them categorize your income and expenses to help you master your own business finances.
Most bookkeepers also do not like filing and dealing with taxes (totally me!). I know the tax rules and can help you to make sure you are abiding by the tax rules and regulations, but filing them is totally not my cup of tea and I'm not sure it ever will, I despise taxes. I went to college for forensic accounting because I love research and digging into the way people spend and make money their money.
I dove into bookkeeping for online businesses because I started seeing so many online business owners struggling with finding accountants and bookkeepers that fully understood their business expenses and how to categorize them.
A bookkeeper should be there for you all month long to help you make the most of your income and actually make a profit in your business.
Whenever you have questions about your business finances, your bookkeeper really should be there to help you with your questions.
But from my observations, there are a lot of bookkeepers out there that can't do that for you because they don't have the education and knowledge to help you.
A bookkeeper is a very important member of your team in your business that you should stay in close contact with.
Finally take your taxes from frustration, chaos and confusion to calm and organized.
Learn everything you need to know to master your business finances and taxes explained in plain English.
What is an accountant in relation to your online business?
Not all, but many accountants, dislike doing bookkeeping. And if they do do bookkeeping for businesses, there is very little communication between them and you during the month.
Accountants deal with so many clients that it's hard for them to be IN your business with you all month long, like a bookkeeper can be.
Accountants will deal with your taxes for your business. If you have questions about your taxes, you can easily get the answers from your accountant and create a tax strategy for your business with your accountant.
Accountants specialize in helping you get your tax bill as low as possible at the end of the year, so you can save money on taxes.
While an accountant is an important member of your team, they aren't fully involved in your business all month long like your bookkeeper is.
An Accountant vs. Bookkeeper for your Online Business: How They Work Together
You may think it will make your life and business easier if you have an accountant and a bookkeeper who is the same person. If you can really find the right person for the job, then I'm not going to stop you from doing this.
I honestly don't think it's in your best interest to have one person who is both your accountant and your bookkeeper.
You need someone who can be in your business all month long - your bookkeeper - and someone who can help you with your taxes on a quarterly and annual basis - your accountant.
Accountants want to help you lower your tax bill as much as possible.
Bookkeepers want to help you maximize your profit throughout the year.
So in order to help you lower your tax bill, accountants may suggest that you buy a course or an asset that you really don't need for your business.
But a bookkeeper will see that you are maximizing your profit so that you have more money to pay yourself.
At the end of the day, profitability in your business is what will make your business grow, not how much money you can save with your taxes. This is how bookkeepers and accountants can help your business the most - profitability vs. saving on taxes.
It is your choice, but I strongly suggest you choose profitability all day long to help you grow your business.
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How to Find the Best Accountant and Bookkeeper for Your Business
When it is time to go shopping for a bookkeeper and accountant for your business, you want to find someone who understands you and your business, as well as the tax rules and regulations so that you can maximize your business profitability.
My suggestion is that you find an accountant who is local to you and you go meet the accountant in person. For a bookkeeper, you will most likely find the best one through the internet and work with her/him virtually.
As long as your bookkeeper is available to help you with questions throughout the month, it doesn't matter where in the country your bookkeeper is located. You have an online business, so why wouldn't you work with a bookkeeper who is also online.
You also want to make sure that your bookkeeper knows how to handle online business - this is why it is suggested that you work with someone who is virtual because you will know they are running an online business and understand online business as well.
I can't even tell you how many accountants and bookkeepers I have come across that do not understand how to handle online business because they are still so stuck in the brick and mortar business world.
Make sure you do your research on your accountant and bookkeeper. Make sure you have a conversation with those you are looking to hire to make sure you can get along with this person.
At the end of the day, you really should have both a bookkeeper and an accountant in your business. Your bookkeeper will help you see the bigger picture in your business to maximize your profit and accountants will help you minimize your taxes.
Are you looking to hire a bookkeeper in your business? I am currently taking some clients. Check out my services here.
Next read: How to Reach a Real Person at the IRS
