Payroll Clerk, Accounts Receivable, Or Accountant? How Should You Handle Your Small Business's Finances?
If you own and manage a small business, you likely have knowledge and expertise in all aspects of your company's product -- from production lines to customer service. However, if accounting isn't your forte, you may want to delegate these specific duties to someone more experienced in this area, as a miscalculation can cost you dearly in taxes or lost revenue. How can you decide the level of accounting services your business needs? Read on to learn more about the basic duties of a payroll clerk and accountant to determine which services may best benefit you.
What type of accounting position best suits your business's needs?
Although all but the smallest businesses need some type of dedicated payroll and accounts receivables system, the specific skills needed and duties required can vary widely, depending upon the legal and tax structure of the business.
If your business's main expenses are personnel-related, you may benefit the most from a payroll clerk. These clerks are able to collect and organize time records from employees, input relevant information into the business's accounting software, and issue checks or set up direct deposit. Payroll clerks can also handle garnishment orders and other offsets that may affect the amount of pay a specific employee is entitled to receive.
Accounts payable and receivable
If most of your business-related expenses instead deal with revenue and purchase costs, you may want an accounts payable or receivable (a/p or a/r) clerk to handle these transactions. These clerks can also handle payroll issues, but are better-equipped to deal with more complex purchase transactions and generating month- and year-end reports showing cost trends.
If you own a service-based business, like a law firm, or deal with insurance providers, you may have few employees but many tax and reporting requirements. Because of the various reimbursement methods among insurers, an accountant may be necessary to periodically review your books and ensure that all transactions have been correctly reported. Although payroll clerks are excellent at categorizing receipts and ensuring that vendors are paid, you may not want to delegate complex tax preparation or other assignments to an employee who isn't a CPA.
For businesses that wish to expand, an accountant may also be able to provide detailed information and advice on helping shelter your income and business revenue from taxation. One of an accountant's most important jobs is not tax preparation or report generation, but helping clients structure their business and personal affairs to maximize the amount of income these clients can keep and reinvest into the business.
For more information about accounting services, contact a professional like Danta Chase & Co CPAs PS.