Accounting vs. Bookkeeping – Not Relevant to Small Businesses Trying to Solve Problems

Accounting is not bookkeeping and vice versa. So what. Clients don’t care – they have problems to solve and they expect that an outsourced Accountant (or Bookkeeper) has the experience and expertise to solve whatever problem the Client has. And, the Client is correct. But the reality is Clients assume that Accountants are (also) highly proficient Bookkeepers, but that may not be the case. It’s like saying, “I’m a great Formula-1 Race Car Driver, but I know nothing about Cars.” Accountants/Bookkeepers need expertise in Bookkeeping/Accounting. Even highly proficient Bookkeepers can create problems for a business’s financial records if they’re not familiar with accounting principles, let alone more complex transactions that may require some research.

For the Client, if you’re planning to outsource your Accounting/Bookkeeping work, ask questions and check the would-be Accountant’s profiles and reviews (on Facebook, Google, LinkedIn or their own Website).

Having and maintaining good records (that tie to your source data) is the fundamental basis toward understanding how your business is performing. It can also enable you to make better quality decisions. Without accurate data and records, you’ll be guessing, at best and throwing salt over your left shoulder for luck. Keep your salt for cooking.

Knowing the Financial and Tax Result of Transactions (Before Doing the Transaction) is a Good Thing

We have the foresight and understanding to advise Clients on the accounting and tax implications of certain transactions before they’re executed. Should you elect a Section 179 deduction for some equipment and write the entire purchase price off or take the depreciation deduction over time if the business is expected to perform better or worse in the out years?

As the Client, you may not care or want to defer to the judgement of your Accountant on what to do. But, ask yourself – how well does my Accountant understand my business so that I’m comfortable that the best decision(s) will be made? 

Our Bookkeeping Expertise

Bookkeeping may not be sexy – it takes time to properly characterize transactions, reconcile accounts, adjust entries and establish charts of accounts. But, Bookkeeping is fundamentally important. Without good records and Accounting, you literally cannot trust your financials. What are you going to use for a Tax Return if you “cut corners” on having solid records? Pretty risky.

I’ve helped clients understand the importance of using QuickBooks workflow processes and the problems that are created when these processes are bypassed or used in ways, not intended. I’ve resolved erroneous or duplicate entries and corrected books/records for many Clients to preserve their historical data without starting from scratch with a new file.