Why Accountants Should Stop Offering Bookkeeping Services
I love accountants – not in a romantic kind of way, but in a more ethereal or platonic way – and I am very happy to say I have great relationships with many accountants in my region.
I believe that an accountant plays a fundamental and essential role in the small business world. In fact, I used to be one myself, although I guess the old adage applies: once an accountant, always an accountant.
I’m sure everyone heard that “but” coming: but there are some things that accountants shouldn’t do, and bookkeeping is one of them. Need help with your tax return, tax planning, business plans and succession planning? You must absolutely speak to your accountant.
If you need help with your bookkeeping, head in the opposite direction of your accountant! It’s not because they don’t know how to do it. They definitely understand the fundamentals of bookkeeping, where the numbers need to go and why they need to go there, but many of them just aren’t very good at it.
The skill set of a good bookkeeper is very different from that of an accountant. The value each of them provides is also fundamentally different. Your bookkeeper should care whether every single credit card receipt was entered from your credit card statement. Your accountant? Not so much. Your bookkeeper should ensure your bank reconciliation balances to the penny, without having to hit that dreaded “Reconciliation discrepancies” account. Your accountant? Not so much.
The function of your accountant should be to look at the big picture and your business patterns, then provide you advice on what those patterns reveal.
Your bookkeeper should care about the small details of your business. Did you claim the $13 HST credit off of that $100 bill? The materiality levels of each are also very different. With most accountants, if it isn’t a material number to the scope of your business, they will just adjust it as a lump sum. That level will be different for every business, and it could be $100 or $1,000. To your bookkeeper, that materiality level is so much lower – and should be.
Business owners need someone watching the pennies in their business, and that isn’t, or should it be, your accountant.
If you are an accountant and you are doing bookkeeping for your clients, STOP! It isn’t a good use of your time or your abilities. Instead, you should be providing higher level activities, not reconciling their bank accounts or entering bills. Not only does this take away your valuable time from providing higher value services with a higher billing rate, you are too close to the numbers and will have a harder time providing an objective review of those financials.
Partner up with a good bookkeeping firm that can provide those services for you, even perhaps under your banner. Focus on what you do best and leave the bookkeeping to the people who pump their fist when their bank account reconciles!