On the surface, accounting and bookkeeping for your small business can feel like another very important task on a long list of very important tasks. Though it involves daily transactions, most small business owners do their accounting and bookkeeping on a monthly basis. Even so, bookkeeping and accounting can take up precious time for small business owners. From setting up your bookkeeping services and professional accounting services, managing your books can feel overwhelming, especially around tax season.
To keep things simple for our Denver, CO small businesses, we’ve covered the basics of accounting and bookkeeping services for small businesses. Learn what accounting and bookkeeping services your small business needs to help you understand your cash flow, liabilities, profit, growth potential, and more.
One of our most frequently asked questions is: What is the difference between bookkeeping and accounting? At first glance, the two may seem quite similar, but the differences between both accounting and bookkeeping are major in the world of financial record keeping.
Bookkeeping is all about recording and organizing financial data. On the other hand, accounting is the analysis and interpretation of financial data obtained from bookkeeping. Bookkeeping lives under the accounting umbrella; it’s arguably one of the most important parts of professional accounting services.
In terms of the role of a bookkeeper versus an accountant, accountants are typically used for more advanced tasks and larger organizations. Bookkeepers handle basic accounting needs, but for small business owners who want to hire someone for strategic planning, maintaining compliance, operations management, and risk assessment, then small business accounting services will be needed. Not all bookkeepers are accountants, but all accountants can handle bookkeeping.
Now that we’ve uncovered what is the difference between bookkeeping and accounting, let’s explore each concept further from the lens of small business owners.
Bookkeeping is the practice of recording your day-to-day transactions. These transactions can include payroll, invoicing, receipts, bills, or daily to monthly business transactions.
As a small business owner, you can address bookkeeping in one of two ways: you can do it yourself, or you can incorporate resources to help you manage your daily transactions. These resources can be as simple as hiring a bookkeeper or an accountant, or can be as complex as setting up and maintaining an accounting software. Bookkeeping for small businesses differs based on preference. So, we’ve covered typical bookkeeping services (and accounting services further downward) you’ll want to consider utilizing for your small business.
Bookkeepers record the daily financial information of a small business, keeping note of expenses, revenue, assets, payroll, and liabilities. They regularly summarize the information they track and record for small business owners to evaluate. Bookkeeping services for small businesses include the following:
Bookkeeping services for small businesses are a must for owners who want to accurately and successfully grow their business. You can either outsource your bookkeeping to an online service, though you’re still in charge of gathering a lot of the information. Or, you can hire a bookkeeper or accountant to manage your books. The latter will save you in time and money in the long run, though be sure you’re selecting bookkeeping services you can trust.
While bookkeeping covers the day-to-day finances, accounting takes that information and interprets it for small businesses. Accounting is the process of summarizing financial data and keeping records of that data. It’s a systematic process that breaks down the financial blueprint of an organization. It tells people who run that organization what they need to know about all the financial elements, such as:
Accounting is necessary for businesses of all sizes, including small businesses. It shares with small business owners key financial information and accurate assessments of that information. It helps small businesses make decisions, plan for costs, and measure their current & potential economic performance.
Small business professional accounting services include bookkeeping services such as: separating business finances from personal finances; streamlining tax processes; simplifying business expenses; organizing financial records and documents; and preventing bookkeeping errors or mistakes early. In addition to those items, professional accounting services provided for small businesses include:
There are also different types of accountants out there, from Certified Public Accountants (CPAs) to Certified Management Accountants (CMA). You can use online accounting services, though they’re a bit more hands on than hiring a small business accounting service.
As with bookkeeping, hiring an accountant is essential for your small business and its growth, though you have plenty of options to consider before you pick which service or resource to use for managing your finances. Especially now that you understand what is the difference between bookkeeping and accounting alongside what services bookkeepers and accountants offer. Now, you can select a small business accounting service that’ll work for your business-management style.
We’ve answered quite a few of our most popular frequently asked questions in this article, like what is the difference between bookkeeping and accounting, what accounting services do small businesses need, and why hire a bookkeeper for your small business. If you have any additional questions on bookkeeping services for small business or small business accounting services, feel free to contact us at 4Corner Business Services. You can set up a meeting with Phil Zavala, founder of 4Corner, to get you on the right track.
4Corner Business Services is Denver’s answer to both accounting and bookkeeping services for small businesses. We offer expert professional accounting services to small and large businesses across the Denver metro area. As an English-Spanish bilingual firm, we offer accessible, accurate, and timely advice for all your business needs. Whether you're looking for accounting & bookkeeping services, organizational support, or business consulting services, 4Corner is here to help you grow.
We can provide your Denver, CO small business with all the bookkeeping and accounting services you need so you can better understand your business’s finances and maximize your profit potential.
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