Bookkeeping and preparing a set of accounts – whats the difference?
You may not realise that a bookkeeper’s role and an accountant’s role are very similar in some instances. After all, both roles involve your businesses financial information. The key point is how each role deals with it, and what their job means to your business.
So, to explain this a little easier, we’ve written a blog to show the differences between a bookkeeper and an accountant and what their role involves. These differences can affect how much you pay to get the work done, and what impact on your business it will have.
Bookkeepers look after the daily financial records of a business (bookkeeping). In simple terms, they ‘keep the books’. So in essence, they keep on top of your customer invoicing, collecting your receipts and look after your bank activity.
Accountants can have a more advisory role. Reporting to business owners, checking the financial transactions, and offering advice. not to mention planning to help save your business a hefty tax bill!
That’s not to say that accountants can’t do bookkeeping for your business. Often it can come as part of the services agreed with their client.
While there are some duties that may overlap between bookkeepers and accountants, accountants hold a professional accountancy qualification and are regulated by a professional accounting body. Bookkeepers may have a bookkeeping qualification or perhaps none at all.
Bookkeepers vs accountants
When you’re running your business, and have staff who already understand the in’s and out’s, you might only need a bookkeeper. They will help to keep everything ‘ship shape’ and most importantly, balanced.
If this is the case, a bookkeeper is going to be the best role to invest in to add the most value to your business. A good bookkeeper is going to save you time and money by getting to know your businesses’ financials quickly.
An accountant’s time is often wasted on inputting data, checking balances, and making sure everything adds up for businesses that don’t have a tight grip on their financial information.
If you’re interested in getting a more detailed overview of your business, the investments you perhaps make, and understanding and handling cashflow better, an accountant is who you should be working with.
To summarise – If you know what you need to have done – you need a bookkeeper. If you’re unsure of what to do – you need an accountant.
So, what does this mean in simple terms we hear you ask?
Our infographic should help answer this question!
A final note…
When you work out just what it is your business really needs, you’ll know where to turn to for help.
Having the right accounting software package set up will in turn help your business further. Technology has changed considerably in the last decade, with the emergence of cloud accounting packages. You no longer need to find a local bookkeeper or accountant, unless you really want one.
Cloud accounting packages allow remote working from anywhere with an internet connection. You can now utilise a skilled professional from anywhere in the world.
To find out more about cloud accounting, read our blog here.