When it comes to handling your law firm’s finances, your practice benefits from hiring experienced financial professionals. But while you’ve likely considered – or already hired – an accountant, you may wonder if you also need a bookkeeper.
“Bookkeeper” and “accountant” are terms that are often used interchangeably. But while there is overlap in their skill-set, they are two separate jobs.
Bookkeepers occupy a more tactical, day-to-day role in your law firm. They oversee your routine financial transactions, tracking transactions in your accounting platform, reconciling financial statements, and providing general office support like invoicing, payroll processing, and more. Bookkeepers can also support firms through:
- Establish best practices for record-keeping
- Forecasting and managing cash flow
- General record-keeping
On the other hand, accountants take on a more strategic position. Often acting in a consulting or advisory role with your firm’s leadership, they use the data from your routine transactions and activities to assess your financial wellness and create strategies. Accountants can help:
- Assess your accounting records for accuracy and completeness
- Plan and manage your income tax preparation and filing
- Provide guidance on tax laws and financial decisions
Bear in mind that bookkeepers can provide meaningful insight and strategic guidance. These skills don’t belong solely to accountants. However, bookkeepers lack one important qualification that accountants can have: the ability to be a certified public accountant, which can be important for lawyers.
While not all accountants are CPAs, all CPAs are accountants. These accounting professionals undergo a rigorous process of training and oversight before being licensed by the state. They’re beholden to ethics guidelines and have to undergo annual continuing education to keep abreast of changes in the field.