The roles of an accountant and a bookkeeper are fairly similar. There can be a lot of crossover in the services they offer.
Whether you’re working with an accountant or a bookkeeper, you’ll be able to focus more on the day-to-day running of your business. You should also get some useful insight into your cash flow and finances. But which one should you choose?
• What’s the difference between an accountant and a bookkeeper?
• Which is best for my business?
What’s the difference between an accountant and a bookkeeper?
While both a bookkeeper and an accountant handle your numbers, their roles are very different.
A bookkeeper will usually take responsibility for the day-to-day recording of financial transactions and handling basic financial processes.
An accountant does more analysis and provides financial advice on the basis of that analysis.
The role of a bookkeeper
• Handling payroll.
• Processing transactions, receipts and payments.
• Managing debts and credits.
• Reconciling accounts.
• Reviewing existing accounting systems.
• Preparing and sending invoices.
The role of an accountant
An accountant can typically assist with all of the above bookkeeping duties.
The role of an accountant also includes more analytical and strategic financial duties.
• Creating and maintaining financial statements.
• Calculating estimated taxes.
• Preparing tax documents and tax planning advice.
• Auditing.
• Advising on long-term financial strategy.
• Forecasting and projecting cash flow.
• Budgeting (and tracking performance against that budget).
• Dealing with financial and tax compliance issues.
Which is best for your business?
A bookkeeper is essential for maintaining high-quality financial records. Bookkeepers will manage your accounts and make sure your day-to-day processing and transactions run smoothly.
More complex issues like compliance and tax planning require an accountant. Accountants will also be able to offer detailed financial forecasting and projections, which most bookkeepers don’t do.
This means there is a strong argument for using both an accountant and a bookkeeper. Hiring an accountant and a bookkeeper will give you a good perspective on your current financial situation, as well as where the business is going.
