Although the two terms are often used interchangeably, “accounting” and “bookkeeping” actually refer to very different services, each of which is essential for a functioning business. Understanding the difference can help determine what type of service you need and what kind of professional you should call in a particular situation. Below is a quick guide to the differences between accounting and bookkeeping services.

Do You Need an Accountant or a Bookkeeper?

Bookkeeping Services

A bookkeeper records your daily transactions, keeping your books up-to-date and maintains the general ledger of receipts and expenses. Depending on the size of your business, they might also handle payroll, generate invoices, and collect supporting documentation the IRS might need later. If you’re constantly struggling to keep up with your books, falling behind on your paperwork, or don’t have a clear idea of your business’s financial health at any given time, you may need to hire a good bookkeeping service.

Accountants

Whereas bookkeepers focus on the day-to-day transactions of a business, accountants use that information to develop long-term perspectives on a company’s financial health. They might analyze data to create sales projections, complete financial statements for the IRS and investors, and prepare your tax returns. Drawing upon their in-depth understanding of the tax system, your accountant will help ensure you remain compliant with changes in the code and avoid expensive fines and penalties. If the IRS does select your returns for an audit, many accountants will also represent your interests and resolve any issues before they get out of hand.

As one of Ashley County’s leading financial firms, Clark W Terrell CPA provides expertise and tailored services to businesses throughout southeast Arkansas. Whether you need an accountant or in-depth, reliable bookkeeping services, their team has the skills to help your business thrive. Keep up with the firm on Facebook, and visit their website or call (870) 364-5006 now to make your first appointment.