What’s the difference? Bookkeeping vs Accounting
What exactly does a Bookkeeper do differently than an Accountant? Do I really need both for my business? There can be a lot of confusion and questions around the difference between a Bookkeeper and an Accountant. If you’ve asked both of those questions, stress no more! We’re here to tell you exactly what each position does and how having both can be a benefit to your business.
What is a Bookkeeper? A bookkeeper gathers information and documents and organises and records the financial transactions of the business, which they file and store so that it can easily be retrieved and accessed. Bookkeepers can either be employees of another company or operate their own business. If a Bookkeeper is operating their own Bookkeeping business, they will need to be a Registered BAS Agent, or they will need to be working under the supervision of a Registered BAS Agent.
If a Bookkeeper is a Registered BAS Agent, then they are required to stay up to date with the latest GST regulations and changes, so that the financial information they record is current. They have undertaken many years of training, together with study and obtaining qualifications necessary to enable them to deliver a high-quality service that is consistent with the legislative requirements of the GST law and the Tax Practitioners Board.
PS. We’re Registered BAS Agents! ;)
Overall, a bookkeeper will ensure your financial figures that are required by the accountant are complete, accurate and are ready for the preparation of your year-end financial reports and tax returns.
Typical Bookkeeping tasks include:
· setting up accounting software packages for businesses;
· recording transactions from source documents into accounting software;
· processing payroll including superannuation and leave;
· preparing and sending invoices as well as reconciling the accounts receivables;
· paying bills and recording payments as well as reconciling the accounts payable;
· reconciling banks accounts, credit cards and loan accounts;
· preparing internal management reports for the business owner;
· occasionally preparing draft financial reports for the business owner, depending on the business structure and size.
So, in short, if organising your books is stressing you out, hand the job over to a Bookkeeper – you’ll be thanking us at the end of the financial year!
What is an Accountant? An Accountant plays a slightly different, but complimentary role for the business owner. They are not involved in the day-to-day operations of the business, whereas a Bookkeeper is.
Accountants periodically, verify and analyse the information that has been recorded by the Bookkeeper and from this information prepares year-end financial reports, gives professional tax advice and other services which can assist the business owner to meet their statutory obligations, as well as their desired business & personal goals. Accountants (Tax Agents) are required to stay up to date with the latest tax laws and they can provide advice on how to best manage a business’ tax affairs. Accountants have many years of study and training behind them that allows them to assist the business owner by reviewing their financial position, preparing budgets and cash flow forecasts, as well as preparing and implementing strategies to help minimise tax.
So, do I need both? YES! In summary, with a high-quality Bookkeeper and a high-quality Accountant, you can be assured as a business owner, that you are receiving the best result possible for your business. Their complimentary roles help in the effective administration of your business’ financial accounts - without your Bookkeeper keeping track of your finances, your Accountant will not be able to do their best job in providing you with financial advice.
A great team = A great result.