For a start-up business owner, the most crucial step is to understand the essential business terms. There is no doubt about the fact that the first terms the small business owners are exposed to are bookkeepers and accountants. In most of the cases, the owners start confusing between the two terms thinking that the job of both bookkeepers and accountants are the same. In reality, these two are poles apart.
For the start-up business owners, it is crucial to have proper clarity on this fact to make sure they can understand which service they are going for. Go through the following to learn about the difference between the roles of a bookkeeper and an accountant more vividly.
The Role of an Accountant
The main task of an accountant is filing accounts along with tax returns. Their prime job is to advise the business owner regarding the strategic management of their business. They also take the responsibility of minimising the business as well as a personal tax liability.
They also advise the business owners regarding cash flow management of the business. The Experts Comptables à Londres (Accountants in London) are more like the sounding board and introduce to a range of several other service providers.
They are designated to provide all year round service and even work when the employers are on leave.
Here is a Complete List of Works Accountants Do
- Reconciling the Bank Account
- Preparing the limited company accounts
- Managing the corporation tax returns
- Calculate the capital gain tax
- Prepare business plans along with cashflow forecasts
- Provide advice on the business structure
- Provide both basic and advanced tax advice
The Role of a Bookkeeper
The leading role of a professional bookkeeper, as explained by the experts of bookkeeping services in London, is to process and keep track of the financial transactions of the business and upload it in the system. Properly paying bills is one of the job roles of a bookkeeper.
Whether it is a small start-up business or an established one, keeping track of expense claims, receipts and invoices become mandatory, and that is job role a bookkeeper is fit for. Some of the bookkeepers are also responsible for preparing VAT Returns, file the self-assessment tax returns and run the payroll as well.
Here is a Complete List of Works a Bookkeeper Does
- Process and Keep track of the purchase invoice
- Issue sales invoice
- Filing and document management
- Chasing customers for payment
- Preparing the sole trade accounts
- (Some Cases) Providing basic tax advice
So, now as you can understand the difference between the job roles of accountants and bookkeepers, it will be easier on your part to decide which way to go.
You cannot deny the role that the providers of accounting or bookkeeping services play in keeping the books of accounts of businesses.
But for these service providers the lives of business runners would have been a nightmare. This is quite an inevitable phenomenon as these businesses come up with some specialized services that help businesses keep certain grave accounting mistakes at bay.
Falling behind the BRS and the Entries
The ones who run business, have to live with time constraint. This leaves them with hardly any time to look after the daily entries and the bank reconciliation statements.
Now, these daily shortcomings accumulate to snowball into grave errors at the end of the months, or years. It results in accounting nightmares when it comes to maintaining business and credit card statements, sales tax, or other financial accounts.
Here is where these providers of bookkeeping services in London makes the difference. The experts of these financial institutes come up with services that help them keep all these accounting aspects up to date. This helps them make sound decisions that give a shot in the arm of their business.
Trying the accounting software without knowing the operation
Then there is the propensity of certain brains behind businesses to try out accounting software systems without knowing the operation thoroughly. In the process, they either make a mess of the data, or forget to feed the system with crucial information.
This again, put the businesses in all kinds of troubles from which only an experienced accounting services provider of London can save. These service providers are home to experts who have experience in handling these accounting software, and that’s an area where these companies help businesses in keeping the books of accounts.
Mixing the personal expenses with the business expenditure
This is a very common fallacy that business end up with, more so if they are start-ups. This, needless to say results in a serious accounting lacuna, which businesses MUST keep at bay.
These companies are home to experienced and highly expert accounting professionals who would maintain the books of accounts in exactly the way they are need to be maintained.
So if you are to keep these mistakes at bay, all you need to do is to hire an experienced bookkeeping service provider with a modest experience under its belt.
All Certified Public Accountants or CPAs are financial advisors, but not all the Financial Advisors are CPAs. Naturally, they might not be able to take care of tax-related issues. However, they can very well plan out financial strategies and help you make various financial decisions all throughout the year.
Now, this goes a long way in reducing the burden of tax during a financial year. Here are some of the ways the financial advisors can help in taking adequate preparation for the tax season.
They Will Help Maximize the Tax Savings
Financial Advisors can go a long way in helping maximize the savings when it comes to payment of tax during a fiscal year. For example, at times professionals may advise you to contribute a maximum amount to your business.
Now, these contributions can be made before payment of tax, thus helping to put away the additional amount of money, which you can gain out of your retirement. This will save you from paying extra tax on that amount. Thus, this advice from the financial advisor London helps you to maximize your tax savings.
They Help You Keep Track of The Capital Gains As Well As Losses
When it comes to filing the tax return, an accountant will have to be informed about the investments that are earned or are lost during a financial year. Here is where your financial advisor’s expertise will come into play. The professional will take stock of all these issues, and keep a constant track on the same. This will help the accountant to take stock of things pretty easily and quickly, thereby saving significant time and hard work.
They Help You Strategize On Gifting Strategies During A Financial Year
Another area where the contribution of a financial advisor comes in handy is chalking out a sound gifting plan. They will help you transfer a portion of your wealth to some other party, to evade tax penalty.
These professionals also come up with invaluable advice on various charitable donations, which go a long way in reducing the burden of tax to a considerable extent.
They Help To Maximize Taxes During Distribution Phrase
At times, tax liabilities can turn out to be a surprise for the investors and hence, can turn out to be pretty significant in determining the amount of payable tax. Professional financial advisors can come with various invaluable management strategies, which can help reduce the impact of various tax liabilities. These strategies will also go a long way to determine the amount of investment, even without incurring any penalty.
They help in the determination of tax-efficient investment strategies
These financial advisors not only provide financial help regarding investment, but they also assist in planning out various investment strategies. Though they are not able to protect from the capital gain tax, they can surely come up with strategy, which will restrict the tax liabilities, thus making the task of your experts comptables à Londres or accountants in London trifle easier.
Thus, you need to bank on the best company that comes up with the most competent financial advisors in London to make savings on your tax and related issues.