The Payroll Blog

News, tips, and advice for small business owners

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If You’re Scared to Crunch Numbers, Who Ya Gonna Call?

Posted On
4/2/2020
By
Denise Stern

As a small business owner, you likely spend quite a bit of time number-crunching. Sometimes, that task can get overwhelming.

A small business owner has numerous responsibilities, but that doesn’t mean that you have to do them all by yourself. If you find working on your books, balancing inventory sheets, or payroll gets confusing, find reliable help.

You don’t have to stress out over payroll taxes, state tax, gross pay, or often-confusing financial information and statements. Take a moment to explore options available to you. Accountants or bookkeepers can help manage your books and keep things flowing smoothly, giving you time to deal with other aspects of small business management.

Do You Need an Accountant or a Bookkeeper?

If you’re struggling with the financial aspects of your small business such as paying employees, or the overall payroll process, consider hiring a bookkeeper or an accountant.

  • Are your payments to vendors consistently late?
  • Do you struggle to pay your bills on time?
  • Do you find your financial reports and banking or loan information confusing?

If your answer is yes to any of these questions, you might consider hiring some help.

Accounting firms are experienced in all aspects of small business finances. Some common small business financial tasks include spending time on accounts receivable, accounts payable, pay periods, what to take out for payroll taxes, and general accounting work. If you can’t stay up-to-date on your bookkeeping tasks, have concerns about cash flow, financial statements, or expansion for your business, a certified public accountant (CPA) may prove beneficial. CPAs can also help by identifying trouble spots in your business such as cash flow shortages or preparation of specific financial statements required by financial lenders for business loans. In addition to spotting the problems in your small business, CPAs are also able to give you tips on how to turn things around and work with you throughout the year to help you stay on track.

Choosing Between an Accountant or Bookkeeper

If you’re nodding along to everything above and struggling with financial statements, it may be time to work with a certified public accountant or bookkeeper. While they both do similar things and can help your small business, there are some differences you’ll want to be aware of.

Bookkeepers generally provide skills that include:

  • tracking sales and profits and income and expenses
  • invoicing customers and paying vendor bills
  • reconciling bank accounts
  • provide some help with payroll (but not always)

Bookkeepers generally have an associate’s degree with 2 to 4 years of experience in bookkeeping.

An accountant generally takes on tasks that exceed those of a general bookkeeper. For example:

  • Preparing and filing income tax returns (including W-2 statements)
  • Preparing and finalizing financial statements such as balance sheets, profit and loss (P&L’s) and income statements
  • Ensuring accuracy in transactions (reviewing records kept by the bookkeeper)
  • Adjusting and recording transactions such as inventory, depreciation expenses, and so forth
  • Ensuring that information provided by financial institution statements match with the bank accounts and loans of the small business
  • Offer financial advice and analyze data

Most accountants have a bachelor’s degree in accounting or finance.

In a nutshell, a bookkeeper’s job is detail-oriented and directly focused on business transactions, dealing with day-to-day operations. Bookkeepers can be in-house or outsourced, taking advantage of online services. A bookkeeper works directly for and reports to the small business owner.

An accountant’s job can also encompass work performed by a bookkeeper, but with more depth. They review for accuracy, especially when it comes to more complex financial requirements of a small business such as preparing tax returns, gathering documentation in the event of an audit or penalties levied by the IRS, and providing W-2 statements and other reports at year’s end.

Accountants are trained to analyze data. However, unlike bookkeepers, accountants can provide financial advice. Analyzing and assessing profits or losses is one of the most valuable perks that accountants can offer you and therefore aid in determining both short-term and long-term financial success of your business.

Where to Find An Accountant or Bookkeeper

When looking for a bookkeeper or an account, or both, look for those who are certified. In the U.S., certified bookkeepers can be found at the American Institute of Professional Bookkeepers (AIPB). Certified public accountants (CPAs) must achieve certification requirements in their state of practice, such as submitting proof of work experience and successfully passing the certification exam. Look for those with two or more years of experience.

Outside of the day-to-day financial tasks for your small business, it would also be worth exploring options for year-end tax prep. When choosing an accountant or bookkeeper to work with, ask if they would be able to help you with taxes. It’s important to prepare for tax season throughout the year, as scrambling right before filing can be stressful. CPAs specifically can help you with this and will be in contact with you throughout the year to help.

Don’t stress. Ask for help.

Payroll and taxes can be confusing, and just because you handle many tasks for your small business, it doesn’t mean that you have to do them all on your own. If you’re feeling overwhelmed with financial obligations for your small business, call someone qualified to help. The last thing you want to do is perpetuate errors that can result in fines and or audits that put your business at risk.

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