If asked to describe the differences between an accountant and a bookkeeper, the average person would most likely say that the two are one and the same. While public perception may be the same for both occupations, their abilities and responsibilities are very different. The disparity between a bookkeeper and an accountant is made apparent when you consider the “Accounting Process” for most businesses: recording, interpreting, classifying, analyzing, reporting, and summarizing. Generally speaking, a bookkeeper is only responsible for the recording part of the Accounting Process (accountants also handle recording responsibilities in most cases). This task consists primarily of data entry into an accounting system to account for the business activity and does not require extensive expertise or decision making. Due to the simplicity of this task, most bookkeeping jobs require very little accounting experience to be successful. Having said that, some smaller businesses with few or infrequent accounting needs can often get by using bookkeeper, but generally speaking in most cases the additional benefit that an accountant can provide is needed. Recording is an essential part of the Accounting Process, but it also provides little to no value without the right person to make sense of what the numbers are saying.
This is where the accountants come in. The staff of The Accounting Office, Inc. (TAO) is made up of accountants who are not only able to record the financial activity of a business, but also provide guidance on how to respond to the performance of the company. Accountants are able to prepare and explain financial reports using standard accounting principles (GAAP), which is beyond the scope of the typical bookkeeper. At TAO, we pride ourselves on our ability to utilize financial data to locate areas in need of improvement in addition to identifying areas of strength that can be further expanded and relaying that information to management. Since accountants have a much broader understanding of accounting they are able to take in to account various factors including cash flow constraints and tax liabilities which, if mishandled or neglected, could be devastating to your business and your personal finances. With the help of our unique insight, clients are able to reduce their costs and increase their revenues because they have a better understanding of how to maximize the resources at their disposal. In this sense, the value that accountants can bring to a business often far exceeds their cost, making them an invaluable asset for any organization.