With bookkeepers managing themselves accountants and accountants rendering services of bookkeepers, the line drawing the difference between bookkeeping firms and accounting firms seems to have blurred. Well, at least many people believe so. However, that is not really the case. There is still a good degree of difference between the two of them- at least between the services that they are trained and supposed to give.  Let’s have a closer look at this.

Here are the points of difference between bookkeeping firms and accountants.

1.     Scale of operations

Bookkeeping firms in Dubai, of course, operate at a relatively small scale, with fewer employees. Usually, a team of 10-20 bookkeepers and a controller would suffice to manage the operations of a bookkeeping firm. Accounting firms, on the other hand, operate at a relatively larger scale. This is because, as you saw above, they offer a greater range of services, thus requiring more employees.

2.     Responsibilities and services rendered

Bookkeeping firms are only responsible for keeping and recording all transaction details. In other words, bookkeeping staff and tasked for making entries and maintaining the books day in day out. At a stretch, the services rendered by bookkeeping companies or even full-time bookkeepers include creating, getting and maintaining invoices and bills, managing reconciliation, reporting to controller or CFO etc.

Accounting firms, on the other hand, offer a greater range of services, of course. In addition to classifying and recording transaction details in journals and ledgers, accounting firms will be responsible for analyzing and interpreting them and making financial reports and statements to assist controllers and chief financial officers.

3.     Qualifications and experiences

Accountants and Bookkeepers don’t need to give any tough tests to be able to work in a bookkeeping firm. Certified accountants in accounting firms have to pass rigorous examinations to get their license and certification. Thus, people in accounting firms use to be relatively much more qualified. They possess more skills as they are trained to cover tax, business reports, accounts analysis, auditing and much more.

4.     Charges or cost involved in hiring

Hiring a bookkeeping firm is ultimately cheaper. Bookkeeping is one of the basic tasks in the finance departments. Therefore, there are lower costs involved. Accounting firms may cost somewhat more. They are just worth it though since you get far greater assistance in the finance department and related tasks.

5.     Suitability

As you can guess, hiring a bookkeeping firm in Dubai will be best suited for small scale firms and startups with limited transactions. Since there would be much less of transactions to record and take care of, a full-service accounting may not really be required. A bookkeeper and a controller should be enough to record analyze and maintain the books and financial reports in such a case.

However, when the firm is operating at a larger level and has a lot of transaction happening on an everyday basis, a reliable accounting firm is a must.

Bookkeeping service or accounting service, which one should I hire?

This, we believe is a very common question, at least among the startups and emerging businesses. From the points discussed above, you can see there is a clear line of difference between the services offered by accounting firms and bookkeeping firms. So how do you decide which one of these would be fit for you?

Here are the situations where bookkeeping companies are ideal:

• Low transactions: When there are limited transactions involved in a company, hiring a reliable bookkeeping firm in Dubai will be sufficient to take care of reports, transaction recording, and documentation.
• A low requirement of intellectual analysis and reporting: In businesses where the implications of accounts and financial statements are easy enough for anyone with a finance degree to understand and manage, hiring a bookkeeping firm will be best.
• No serious tax and legal formalities involved: You can go with bookkeeping agencies when there isn’t any serious taxing or formalities involved.

Here are the situations where accounting firms are ideal:

• Growing, moderate or large scale business with numerous transactions: You’ll end up hiring an accountant anyway, for checking the books and statements now and then. Isn’t it rather better that you have the professionals of an accounting firm to handle all the transactions from the beginning itself?
• Regular Tax return filing and meeting legal formalities: Bookkeeping firms do not handle Tax, auditing, etc. As your business grows, or if you have a medium or large scale business in UAE, you will need to comply with multiple Tax and related requirements. Hiring accounting firms will be ideal in such scenarios as they will take up the burden for you.
• Meeting on GAAP standards: While bookkeepers can maintain the books according to what you propose and require, you should hire where you need to be sure that the books are maintained up to GAAP standards. This can be quite crucial, especially for growing and established businesses.

So you get the gist now. You simply hire bookkeeping firms and services where the need for bookkeeping is on a primitive level. As your operations spread, accounting services should be given more preference.

Full-time or interim accountant or bookkeeper- which one should you hire?

Now, whether or not you need to hire a full-time accountant or bookkeeper depends largely on the level at which you operate, the transactions and work involved, the expertise required and the resource available with you. There can be certain benefits of recruiting a full-time accountant when you have a good lot of transactions to handle and enough resources to keep ‘em. Hiring an accounting firm like Finacctech can, on the other hand, bring you the expertise of accountants and finance professionals at half-the-cost. You can even choose a combo- you can keep a full-time bookkeeper and for filing returns, creating financial reports and statements, you can hire accounting firms or interim accountants.