One of the most common pieces of advice small business people receive is that they should hire a professional to help with their books. But, do you really need a licensed accountant for that? What about a bookkeeper? Isn’t that the same thing? What is the different between a bookkeeper and an accountant and which one should you use?
Although the terms bookkeeper and accountant can be used interchangeably to some degree, they really aren’t the same thing. Bookkeepers are primarily data entry jobs, that do exactly what their name implies: they record financial transactions and keep the books for a business. Accountants, on the other hand, are typically a licensed profession that focuses more on reporting and analysis. They two jobs often work in tandem, with the bookkeeper doing the input and the accountant doing the analyzing.
In my experience, small businesses who’s owners are too busy selling to bother with organizing their office can often do with a bookkeeper to help them sort through and organize the mess of paperwork associated with running a small business. Once a year or so, if the business is large enough, and/or the bookkeeper isn’t your spouse, you should probably have everything reviewed by an accountant. The accountant can also help you with your taxes, if you’re so inclined.
If you’re thinking about what kind of business to start, and you’re good with numbers, organized and honest, a bookkeeping business can be a good choice. A college degree isn’t necessary, because the work isn’t substantially more difficult than balancing a checkbook, but if education is your thing, take a bookkeeping course. There are many available, both online and off, that will help you learn how to balance a ledger, create a profit and loss statement, etc.