Many taxpayers may think bookkeeping and accounting are the same things. The roles of bookkeeping and accounting services are not the same. They have different day-to-day duties, as well as the experience needed for each. Both roles often work together, but they also have separate duties. It’s important to be familiar with both roles as a business owner. These are six key differences between online and virtual bookkeeping.
Daily Differences
Virtual bookkeepers excel in day-to-day tasks such as building reports or recording sales transactions. Online accountants, on the other hand, focus on the bigger picture and analyze financials to create a plan of action that will best benefit an individual or company. Both can help businesses grow and manage their finances. They each have their own strategies and plans for achieving their goals. Despite having the same goals, their processes are quite different. This is further highlighted by the fact that accounting services are able to handle projects differently than bookkeeping services.
Project Management
Project management is an important factor in comparing financial titles and financial positions. This is because it is where the majority of the differences are found. Bookkeepers are responsible for managing large projects, while accountants handle smaller ones. This is because virtual bookkeeping requires more math than accounting.
It is important to clearly identify the reasons for hiring a virtual accountant or bookkeeper. You may prefer an accountant to handle larger projects if you as the business owner feel confident in your ability to manage the daily tasks. You may need help with the day-to-day tasks of your business, especially if it is still in its early stages.
Assets & Investments
An accountant uses reports to improve your company’s financial health. A bookkeeper keeps records. Another example might be asset management with a bookkeeper or investment planning with an accountant. Asset management is about managing equity and estates. Virtual bookkeepers are able to handle this, but online accounting services can also be used for investment opportunities, such as the development of plans that maximize asset benefits.
Education and Experience
Accounting firms tend to hire professionals who have more experience and education than a bookkeeper. This is also related to the above-mentioned difference: accountants create strategies using reports. Additional experience is required to ensure that the strategies are most beneficial for clients or employers.
Additional Accountant Titles
Online accounting services can include a variety of positions within the accounting field, while bookkeepers manage journals and ledgers as the title implies. Some examples include:
- Certified Public Accountant
- Manager Accountant
- Forensic accountant
- Financial Advisor
These are only a few examples of the available positions for accountants. Accounting can be used by individuals or businesses for a variety of financial functions. This requires additional knowledge that is tailored to the business’s needs.
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Accessibility
Bookkeeping and accounting services are both available in-house or externally. Virtual bookkeeping offers business owners the opportunity to use the software if they wish. The Bookkeeper-designed software can be intuitive and easy to use and allows business owners to keep track of sales, reports, and other financial documents.
Accounting services on the other hand handle software that is not easily accessible to business owners. The accountant’s expertise is why business owners may feel more comfortable allowing them to share the information. It is important for business owners to assess the financial health of their business and to see if accountants or bookkeepers can provide insight and clarity.
