For many taxpayers, bookkeeping and accounting services may appear synonymous. However, the financial roles differ in a few ways, including their day-to-day duties and the overall experience required for each position. They often work in conjunction yet fulfill separate duties. As a business owner, it’s a good idea to familiarize yourself with the two roles. Here are 6 key differences between virtual bookkeeping and online accounting services.
Virtual bookkeepers shine during day-to-day activities, such as recording transactions and sales or building reports. On the other hand, online accountants focus on the big picture by analyzing financials and drafting a plan of action that best benefits an individual or business. Both services manage finances, and both can benefit a business’ growth. But they each deploy different strategies and plans to accomplish their goals. Thus, while the goals are the same, the processes are different. This difference is embellished in another difference; in addition to day-to-day activities, accounting services handle different projects than bookkeeping services.
When surveying the differences between financial positions and titles, project management is a major factor because that is where most of the differences occur. To summarize, accountants manage big projects while bookkeepers juggle multiple smaller projects—this is because bookkeeping involves more number-crunching than accounting usually involves.
When recruiting a virtual bookkeeper or accountant, it’s helpful to identify the reason for recruitment. If you, as the business owner, feel confident in your abilities to manage the day-to-day duties, then you may prefer to recruit an accountant for the larger projects. If your business is new and in the early stages of development, you may prefer assistance with day-to-day duties and recruit a bookkeeper to focus on initial growth.
Assets & Investments
A bookkeeper files reports, while an accountant utilizes reports to improve your business’s financial health. Further examples might include asset management with a bookkeeper and investment planning with an accountant. Asset management revolves around managing equity and estates, which virtual bookkeepers can handle, but online accounting services expand into investment opportunities to develop plans maximizing asset benefits.
Education & Experience
Accounting services tend to employ professionals with additional experience and education in their field compared to recruiting a bookkeeper. The reason also ties in with the difference mentioned above; accountants devise strategies using reports, which requires additional experience to ensure the strategies will most effectively benefit a client or employer.
Additional Accountant Titles
While bookkeepers handle ledgers and journals as the title suggests, online accounting services may include various positions from the accounting field. Some examples include:
- Certified Public Accountant
- Management Accountant
- Forensic Accountant
- Financial Advisor
These are just a few examples of available accountant positions for recruitment. Accounting covers a wide range of finances for both individuals and businesses, which requires additional specialized knowledge depending on a business’ needs.
Both bookkeeping and accounting services can be utilized in-house or outsourced. However, one benefit that virtual bookkeeping possesses includes software that business owners may use should they choose. The software, designated by the bookkeeper, is intuitive, easy to use, and allows business owners to keep track of their reports, sales, and other financial documents.
Accounting services, on the other hand, handle software less accessible to business owners themselves. This is due to the accountant’s specialized expertise, and a business owner may feel more comfortable allowing the accountant to relay the information themselves. As a business owner, it’s important to survey your business’ financial health and how bookkeepers and accountants may be able to offer clarity and insight. If you’d like to learn more, or request virtual bookkeeping or online accounting services, contact us, and an expert will help you as soon as possible.