Difference between a Bookkeeper and an Accountant

Bookkeeper vs Accountants

Bookkeepers and accountants both help you manage the financial health of your business. There are overlaps in their work but also significant differences. Accounting is a broad field with many specialisations and different functions and bookkeeping is just a subset of this broad field. So what functions do they perform and how can they help your small business grow? Keep reading to learn more.

What are bookkeepers?

Bookkeeping involves recording financial transactions - purchases, sales, and payments for a business. They ensure all the records are up to date and maintained in a systematic, chronological way.

Common tasks that bookkeepers need to do

Record financial transactions on a consistent basis
Manage payroll, invoices and debt
BAS preparation and lodgement
Single Touch Payroll for tax and superannuation reporting
Management Reporting to keep track of where your business is going
Financial Reporting - manage balance sheet, profit and loss statements, accounts receivables and payables, and cash flow
Streamlining reconciliation with the bank
Using cloud-based accounting software like Xero

What are accountants?

Accounting is a process of recording, storing, retrieving and analysing financial transactions.

‍Accountants verify and analyse the financial records of an individual or business so they can make informed decisions. They also prepare reports and perform audits to ensure the books are watertight.

Common tasks that accountants do

Establishing a new business and deciding the business structure
Tax planning and advice, file tax returns
Reporting and compliance
Financial advice by evaluating business trends and present new opportunities for growth
Forecasting cash flow and budgeting
Regular Auditing
Assist you with setting up your Self Managed Super Fund (SMSF)

Similarities between bookkeepers and accountants

Before we discuss the differences between the two, lets discuss their similarities.

Obviously, both of them deal with numbers and have overlaps in the work they do. Some of the similarities between them are:

Dealing with financial transactions and reporting
Ensuring the financial records are accurate
Maintaining a strong financial health of your business.

Although they have common goals but perform totally different functions and come in handy at different stages of your business. For example, for day-to-day tasks, bookkeepers are perfect. While accountants can help you with financial advice and file your taxes during tax season.

Differences between bookkeepers and accountants

Bookkeepers record financial transactions whereas accountants analyse it.
Bookkeeping is a subset of accounting.
Bookkeepers help you with collecting the data regarding your business. Accountants analyse the data and turn them into relevant information for your business. They can help you understand the big picture of your business - where your business is currently and how you can grow your business.
Different study pathways - The qualifications differ for accountants and bookkeepers.
Bookkeepers need to go for a Certificate or Diploma course in Accounting and Bookkeeping. They can provide BAS services if they are registered with the Tax Practitioners Board as a BAS agent. While Accountants pursue a bachelor’s degree in accounting and are more qualified and specialised. They also need to meet the accounting code of practice and need to be reigstered with the accounting bodies in Australia like Certified Professional Accountant (CPA), Institute of Public Accountants (IPA) and Chartered Accountants Australia and New Zealand (CAANZ).

Should you hire a bookkeeper or accountant?

Did you know that over 66% of small businesses shut their operations within 10 years? Why?

It is mainly due to the lack of operational CASH FLOW and poor BUDGETING! With limited resources and money, small business owners can find it challenging to manage their budget and as a result lose money. That’s where the help of professional accountants comes in really handy. A good accounting firm will have bookkeepers and accountants who can assist you in every phase of your business.

Bottom Line Control - Best Accountants in Sunshine Coast

Are you unsure of how you can manage your cash flow and the sustainable growth for your business? At Bottom Line Control, we can help you with a holistic solution for your business - bookkeeping, investment, tax advice. Our experienced accounting team has helped a lot of businesses grow and would love to help you too. Contact us today at 5471 7077 or complete our online quote form.

Sources

https://fortunly.com/blog/what-percentage-of-small-businesses-fail/#gref