Why You Should Have Separate Bookkeepers and Tax Accountants

A business requires accurate, clean books that are updated at least monthly. You have two options to achieve this goal: hire a professional or have a year-end accounting firm handle your bookkeeping.

Technically, it's OK to ask an accountant for help with your daily books. However, we recommend that you work with both year-end and bookkeepers.

Before we examine the reasons, let's first look at how accountants' and bookkeepers' duties vary.

Bookkeepers' duties vs. accountants at the year-end

Bookkeeping duties

A bookkeeper's responsibility is to keep track of your company's daily transactions, preferably in an accounting program general ledger. This will allow you and your accountant to make better financial decisions.

However, the core tasks of a bookkeeper are usually:

  • Recognizing and recording financial transactions that involve business revenue and expenses

  • Invoices from suppliers to be paid

  • Invoice creation

  • Received payments are being processed

  • Calculating and paying sales tax

  • Reconciliation of bank and credit card accounts

  • Produce monthly financial statements (including balances, income statements, and cash flows statements)

  • Assist with payroll in some cases

Bookkeepers are generally cheaper than Chartered Professional Accountants (CPA) and offer a cost-effective solution to keeping your books current over the long term.

电竞竞猜选手今日网址 duties

Year-end accountants verify a company's financial statements throughout the year and prepare the final reports necessary to file the company's annual tax returns.

This means that the core duties of a year-end accountant typically include:

  • To determine any year-end adjustments, review the financial statements for the fiscal years

  • Tax adjustments for charitable donations, meals, entertainment, and depreciation

  • Preparing and often remitting company tax returns

Many businesses use professional accounting firms to file their annual taxes during tax season. Your business could be at risk if your accountant handles your bookkeeping records.

Why not hire bookkeepers and accountants for the year?

You should consider hiring separate bookkeepers or year-end accountants for these three reasons.

An extra pair of eyes can help prevent fraud and errors

Your year-end accountant can also do your bookkeeping, so they are less likely to make mistakes in the accounting process. It's not uncommon for independent accountants or bookkeepers to profit from the trust and financials of business owners.

A Canadian accountant was recently accused of defrauding an organization he worked for nearly  $1.5 Million .

This accountant, who was responsible for downloading bank statements from the company and financial reporting, performed several "improper" and unauthorized transactions.

  • Missing financial records (including unreported revenues received or excess cash available).

  • Bank statements altered

  • To hide the misuse of funds on his credit card account, he will make periodic repayments

Having a bookkeeper manage your books and an accountant reviewing your financial data at year's end will help you avoid potential mistakes.

This can not only prevent expensive penalties but also bring fraud to light. It will allow your business to reduce the risk of embezzlement, tax fraud, and other financial violations.

Tax accountants are experts in year-end and not daily financial activities

You shouldn't trust a tax accountant to handle your bookkeeping, just as you wouldn't consult your skin doctor for a problem like a rheumatoid. While both dermatologists and gastroenterologists are qualified doctors, they have different specialties. Accountants are the same.

You can be confident that you are working with an expert in tax matters by hiring a year-end accountant who focuses on tax return preparation, tax law, and optimizing tax cuts.

While they are busy with debits and credits, professional bookkeepers (and financial accountants) also spend time dealing with everyday business transactions. Therefore, you can trust them to keep your books current and accurate.

Bookkeepers can offer a more consistent service

Businesses tend to have December 31 and March 31 fiscal year-ends, which means they share the same tax deadlines. As a result, many accountants are extremely busy and distracted during tax season.

You can rely on an accountant for your year-end bookkeeping

  • During this time, you might have difficulty connecting with them

  • They could focus on your bookkeeping intermittently or for several months

  • You could lose real-time access to your cash flow and other financial data

Your business' success depends on having accurate and timely books. Working with separate bookkeepers or year-end accountants gives you more financial oversight. It also ensures that your books are consistently updated from month to month.

Your bookkeeper can also communicate directly with your accountant for financial statements and other questions. This will allow you to focus on your business growth and reduce tax season stress.

Looking for an accurate, stress-free, year-round bookkeeping service ? Basis 365 can help.

Basis 365