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Posted on August 12, 2013

Do I really need a bookkeeper?

Written by Avner Polatsek | @AvnerPolatsek

bookkeeping

At AP Tax, we offer accounting services, like preparing tax returns, but we also provide bookkeeping in Toronto. One of the questions we are regularly asked is whether or not a business needs an accountant or a bookkeeper (most likely, both).

We think that the main reason that we’re asked this question is that the definition of these two roles is a little blurry. Why hire a bookkeeper when you already have an accountant?

Big Picture vs. Daily Life

The main difference between an accountant and a bookkeeper is that an accountant looks at the big picture of your business and can advise you on financial strategy, especially when it comes to tax time. A bookkeeper is involved in the day-to-day activities of your business and keeps track of your income and expenses. They might even manage your payroll and take care of your accounts receivable and accounts payable. In other words, a bookkeeper follows through with the strategy your accountant creates.

When should I hire a bookkeeper?

The answer to this question really depends on you, the business owner. Some people hire a bookkeeper as soon as they start a business because they know that they want to have accurate and tidy books right from the beginning. Others do their own until they get too big to do manage.

Because bookkeepers can usually be hired for as many hours as you need them on a weekly or monthly basis, you can have quite a bit of control over how much of an expense they will be.

5 Reasons You Might Want a Bookkeeper

  1. You don’t trust yourself to do it. A lot of business owners acknowledge that they might not have the knowledge they need to manage their bookkeeping properly.
  2. You don’t have the time. If you’re spending time sorting through receipts and chasing payment, you aren’t really working at your business.
  3. You would like to be organized. Professional bookkeepers have well-refined systems so that when something comes up, like a broken piece of equipment, they are able to find the information you need to respond immediately and avoid your business coming to a grinding halt.
  4. You could use the information to grow. Having up-to-date records allows you to analyze trends in your business and identify ways to strategically grow.
  5. You think that you could save more money. It’s extremely common for a bookkeeper to save a business more money than they cost the business to keep around. One of the fastest ways to lose money is by not knowing where it is going!

Out of all of these reasons you might want to hire a bookkeeper, accuracy is probably the one you should be looking at first. Incorrect books could be affecting the tax that you’ll pay and will definitely jack up your accounting bill at tax time.

Contact us if you would like to meet one of our bookkeepers and hear more about how they can put your books in order.