Payroll, Bookkeeping and Accounting

Why They’re Different and Why That Matters

Keeping your business’s finances in check takes time, dedication, and a high level of financial
experience. As a business owner, you might employ a variety of different people to make sure that
every part of your business’s finances runs like a well-oiled machine. Some of the financial
professionals you might work with include payroll managers, accountants, and bookkeepers.
While each of these roles ultimately contribute to keeping your money matters managed, they each
have their own set of unique skills and responsibilities. This article will give you a clear outline of
what each of these roles entail and why you as a business owner or manager need to know the
difference.

What Does Your Payroll Team Do?

Your payroll department or manager is responsible for tracking and managing how much, when
and how your employees get paid by your business. With that in mind, it’s not difficult to
understand why payroll is important to the success of your business.

Your payroll manager or team will be responsible for calculating what your employees will be paid
on payday and then making sure that they get paid on time. Another reason why payroll is
important is because your team will be tasked with keeping track of all your employees’ financial
records at your company. This includes things like their wages, their bonuses or deductions, and
any withheld taxes.

While having a payroll manager or in-house team is great for large businesses and teams, there
are software and outsourcing solutions available for smaller businesses or brands.

What Does An Accountant Do?

Having an accountant – whether in-house, online or outsourced – is a non-negotiable necessity for
any business. A reputable accountant has the skill to not only process financial records, but also
apply their own insight to analyse and report on these records to help your business streamline its
financial processes. Some of the responsibilities of an accountant also include:

✓ Creating a budget for your business
✓ Using your financial information to compile tax returns
✓ Helping management address certain issues by sharing in-depth reports
✓ Preparing and sharing your business’s unique financial statements to show its performance
throughout the financial year

A key difference between bookkeeping and accounting is the fact that your accountant will often
need to present the financial information they gather in a way that makes sense to the rest of the
business, employees, and various internal and external shareholders.

By creating resources and documents like balance sheets, financial reports, and income
statements, your accountant will be able to give you the insight into your professional finances you
need to stay on top of your game as a business.

What Does A Bookkeeper Do?

Bookkeeping and accounting seem similar on the surface, but bookkeeping can actually be
considered the initial part of effective accounting. Your bookkeeper would be responsible for
documenting, saving and finding all the financial transactions for your business.

Your bookkeeper could also help manage various transactions like billing, payroll processing,
monitoring accounts receivable, and paying various suppliers. Some other responsibilities include:
✓ Generating and sending out invoices to customers
✓ Paying your suppliers or service providers
✓ Tracking and logging cash receipts
✓ Managing and processing payroll for your employees
✓ Keeping track of your petty cash and any transactions made with it
✓ And more

Having a dedicated in-house bookkeeper is often beneficial, however, most businesses tend to use
bookkeeping computer software or outsource the work to a reputable accounting agency.

Why Should You Care About The Difference?

Now that you understand the main difference between bookkeeping and accounting, as well as
why payroll is important, you should be able to see some of the similarities as well. Bookkeeping,
payroll and accounting are all parts of the same financial sphere, and each contain their own
requirements.

While each role is unique, they can ideally be performed by the same person or agency. One of the
best solutions to track, manage and optimise your payroll, bookkeeping and accounting processes
is to outsource them to a professional team.
This option gives your business the opportunity to save time, money and effort that would
otherwise have been wasted on trying to find three different employees. Because you’ll be working
with one agency or service provider instead of three employees, you can also be sure that the
financial information your business needs to store, retrieve, analyse and use is more easily
accessible.

Speak To A Team That Knows The Industry
Work With ALP Peak

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