beancounting-v-bookkeeping-v-accountingSince launching an accounting firm with a focus on bookkeeping, the question of where bookkeeping ends and accounting begins arises often. I work as a bookkeeper with clients’ year-end accountants and I work as a year-end accountant with clients’ bookkeepers. Did I fail at finding a niche? We’ll see.

Bookkeeping

Bookkeeping is a field that doesn’t get a tonne of respect in many circles. When I was charging $50/hr for standalone bookkeeping services, I was often asked why they’d pay an accountant twice as much as a bookkeeper? My reply was often:

“I’m the person you call when the $25/hr bookkeeper doesn’t work out.”

A reasonable price conveys some reasonable value, sure, but it’s not about paying more for the sake of paying more – it’s about making sure you get results that give you a return on investment.

ROI on Bookkeeping!?!

The longer it takes you to get reports, the less valuable they become. For example, if you receive a quarterly report a full month after the quarter ends, what can you learn? If you had a cash flow problem, that’s probably front and centre already. If your receivables are too high, it might have been nice to have collected 30-60 days ago. High payables due to a forgotten bill? No good.

The more you know about key figures in your business, the quicker you can act. If bookkeeping costs between $300 and $1,500 per month depending on your situation & volume, and you can get more cash flowing without being late on your bills, why wouldn’t you take it?

There are tangible returns on investment in timely bookkeeping, but one that might be overlooked is the fact you account for receipts frequently: there’s no mad dash to complete your annual scrapbooking project!

Accounting

Taxes, year-end reports, taxes, future planning, taxes, and taxes. A decade in industry and then time in public practice has taught me that accounting is misunderstood to a large degree. There’s a joke that says:

“Accountants solve problems you didn’t even know you had in ways you can’t understand.”

The joke applies to any number of professionals, but accountants seem uniquely qualified to fit this statement because of “numbers.” Everyone knows that accountants do taxes, but are either generally qualified or may have specialization in:

  • Estate planning
  • Corporate finance (e.g., shares, dividends, corporate structures)
  • Projections and forecasts
  • Determining the value of your company
  • Financial reporting
  • Analysts…

Any list of accountants is incomplete without “bookkeeping” because there’s no point in bookkeeping without reporting and you can’t do accounting without bookkeeping.

Bookkeeping and Accounting Together in the Cloud

David Macdonald Chartered Professional Accountant leverages Receipt Bank and Xero Accounting Software to integrate accounting with bookkeeping seamlessly. We also use Xero as our year-end processing software so that every piece of data we compile together is accounted for with no intermediary. That your receipts can directly inform your accounting year-end is a revolutionary step in accounting. We’ll end the geekery there.

Contact us today to learn how you can benefit from improving your bookkeeping or entangling it with your general accounting.

Learn more:
Xero – http://www.xero.com

Receipt Bank – http://www.receipt-bank.com