Accountant, Bookkeeper, or Business Advisor: What’s Right For Your Business?
Most people don’t get into entrepreneurship to spend their nose in financial statements—they go into entrepreneurship because they want to devote their working life to something they’re passionate about. The good news is that there are people out there who devote their work to helping entrepreneurs and small business owners make sense of their books. If your eyes glaze over at the thought of profits, expenses, and taxes, then it might be time to call in a professional!
A bookkeeper is responsible for providing accurate and up-to-date records of all business transactions, like credits, debits, and sometimes payroll. While some bookkeepers can be involved in business strategy development, bookkeepers are primarily responsible for organizing financial information so it can be passed on to a business owner, manager, or accountant for financial analysis.
An accountant uses business financial records to forecast and analyze business health, prepare tax returns, and create P&L statements. One of the main differences between an accountant and a bookkeeper is that an accountant has knowledge around compliance and legal requirements for small businesses.
A business advisor or manager is responsible for executing strategic initiatives meant to increase profit or improve operations. Business advisors strategize based on the financial documents that your bookkeeper or accountant provides. A business manager can be a valuable asset to a small business owner, as long as the financial information the advisor receives is accurate and up-to-date.
Consider how mature your business is before you hire someone to manage your books
Is your business full-time, or a side hustle? Do you have employees, or are you a sole proprietor? Do you hire contractors, or are you a one-man (or woman)-show? Ask yourself these questions before you bring on someone to manage your books. If you’re particularly tech savvy, you could get away with managing your books using a cloud accounting software like Xero or Quickbooks, but if you’re planning to scale your business, or you’re not comfortable using cloud accounting, it’s advisable to bring on somebody sooner rather than later.
When to bring in a bookkeeper
Does the term “month-end” give you goosebumps? If you’re a small business owner that prefers to spend your time running your business rather than inputting expenses, a bookkeeper might be the solution. Most business owners have their accounts reconciled monthly, but some prefer to reconcile bi-weekly, or even weekly, so they can have the most-updated information at their fingertips. Sign Especially if you’re in a position where you need to make quick business decisions, it can be valuable to reconcile weekly—but what business owner has time to do that, on top of everything else! Bringing on a bookkeeper that reconciles weekly lets you get back to running your business, and doesn’t keep you waiting until the end of the month to see where your business is at.
When to bring in an accountant
If your needs are a bit more complex and goes beyond simple transaction inputs, bringing on an accountant might be the best approach. An accountant can prepare P&L statements, tax returns, cash flow projections, business forecasts, as well as provide advisory services for small business owners who are facing anything from applying for a loan, to having conversations about buying or selling a business.
If you have (or plan to have) employees, an accountant can get your business set up so you’re paying the correct provincial and federal taxes, insurance, and other deductions, so once tax time rolls around you don’t have any surprises. In addition, accountants are useful when applying for financial products like business loans or credit cards. Entrepreneurs and self-employed people often face more barriers than traditionally-employed people when applying for credit products because of the potential volatility of their work. Banks are known to view small business owners and entrepreneurs as “high-risk”, but with an accountant they’ll be able to provide the financial statements needed to make the application process a breeze.
Hiring a financial professional is the best way to protect the health of your business
If you’re not at the stage where you need to bring on an accountant, but you’re realizing it’s too much of a lift to manage your own books, huumans is here to help. huumans integrates with cloud accounting software you might already be using (QuickBooks and Xero), and assigns you a bookkeeper that will being reconciling your accounts weekly. Businesses of any size can benefit from this model, and when your business does get to the point where an accountant is needed, huumans also offers CPA advisory services as part of their enterprise accounts.
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What is huumans?
A smart, cost-effective bookkeeping service designed specifically for small business owners, huumans provides same or next business day support, guaranteed weekly reconciliation and fixed, transparent monthly pricing. Your business numbers, directly calculated from your constantly reconciled accounts, are presented in a free, easy-to-understand, on-demand, shareable dashboard - and like your billing, it can be managed online whenever you find it convenient. Offering the most cost effective small business managed payroll services in Canada, we also provide specialized discounts for startups and new businesses, along with dedicated solutions for franchises.