One of the things you need to monitor when you own a business is your financial situation. It plays a major role in determining your success in the industry. To help business owners like you monitor this area of your business, you need to have a bookkeeper and an accountant.
Both of them are involved in finance but they have distinct responsibilities to accomplish. Accounting and bookkeeping services in the Philippines play a significant role in your life as a business owner. Learn more about their roles below to assess who’s fit for your operations:
What are the Nuances of These Two Roles?
An accountant and a bookkeeper are two professions that many are confused with. The terms may seem like you can interchange them but in reality, you cannot interchange them because both have very different roles and functions.
Bookkeepers focus on collecting and organizing raw data. This includes tasks such as recording and categorizing financial transactions, preparing and sending invoices, posting debit and credit, making payrolls, keeping records, and maintaining ledgers, subsidiaries, and the such.
Accountants focus on analyzing data using financial statements and many other tools. They prepare, audit, and adjust financial entries. They also prepare your financial statements, complete and file tax returns, make financial analyses and business strategies, make tax strategies, and offer services like financial forecasting.
-Different work nature
The nature of their work is what makes bookkeepers and accountants different. Bookkeepers dwell more on the administrative side of the business. They ensure that the records are accurate.
On the other hand, accountants are involved more in decision-making. They make the financial statements, assess the financial situation and capacity of the business, as well as provide a financial forecast to help your business grow. Accountants do all those things based on the records that the bookkeepers make.
Bookkeepers and accountants have common goals but they are very different. However, it is important to note that these two are helpful in different stages of your financial cycle.
Roles and Responsibilities
If you’re thinking of outsourcing work, it would help to know specific obligations. The following are the roles of an accountant:
- They create and maintain the company’s financial statements.
- They compare the budget plan and actual expenses.
- They record the accrued and deferred revenues.
- They create the company’s budget and loan plans.
- They prepare tax documents and see all the possible tax deductibles.
- They make financial forecasts.
The following are the roles of a bookkeeper:
- They record payments from clients and customers.
- They keep track of late payments and notify those concerned.
- They make and send invoices to vendors.
- They process payroll transactions.
- They process and pay the invoices from the suppliers.
- They process petty-cash transactions.
The differences in roles mentioned above make it safe to say that accountants relatively have more complex work compared to the work that bookkeepers have. Accountants bear more responsibilities, and those that represent others to the BIR for tax and audit services in the Philippines need to have certification as CPA.
Accountants need comprehensive and complex analytical skills. They must also have an accounting college degree and a license to practice accounting for Certified Public Accountants. Meanwhile, bookkeepers do not need an accounting degree. They also don’t need a specific skill since most of the work of bookkeepers is more on the administrative aspect. One thing they need to have though is to have keen attention to detail.
Most accounting services in the Philippines use the following tools: Profit and loss statement, balance sheet statement, and cash flow statement. On the other hand, bookkeeper journals and ledgers. Moreover, both of them use different software to help them be more efficient in their job.
Managers or business owners work with accountants to help them make good business decisions. Accountants can help with project management, make future projections, and serve as business advisors. In contrast, bookkeepers do not play a role in making business decisions.
Harmoniously Working Together
Both accountants and bookkeepers have their responsibilities to fulfill for the business to reach its long-term and short-term goals. Though they have different roles to play, they must work together in harmony. That way, they can make a more accurate picture of the financial situation of the business. The bookkeepers need to ensure that all the financial details in the records are accurate for the accountants to also make an accurate financial statement.
Some businesses prefer to handle their own finances while other businesses prefer to hire professionals because it is highly beneficial and more cost-effective to count on the pros than attempt a DIY. This is to avoid making mistakes that will be a problem in the long run if not corrected.
Remember, hiring professionals will give you more time to work on other aspects of your business. You can also learn about the latest accounting and bookkeeping technologies from them. If you need assistance with accounting services in Pasig and beyond, call us for a free consult.