Should you hire an accountant or a bookkeeper for your business? Engaging the right professional can help grow your operations while unburdening your load.
Although the terms “bookkeeper” and “accountant” are often used interchangeably, these two professions contribute differently to businesses.
The role of a bookkeeper
Bookkeepers are sometimes known as accounts clerks and they record financial transactions into your books.
Modern bookkeeping involves understanding how a business works and thinking about each stage of its processes in order to capture information that lets owners know how well it is doing.
Bookkeepers offer services such as:
– Processing purchases, sales, expenses, receipts and payments
– Preparing invoices and chasing outstanding debtors
– Processing payroll data
– Bank and credit card reconciliations
– Preparation of GST returns if they are registered BAS agents
– Preparing reports for owners and accountants
– Record keeping
You can use a bookkeeper to establish consistent procedures and business files that are easy to understand. He or she should also have a basic knowledge of accounting software.
How an accountant adds value
Accountants can be all-rounders or specialists in particular industries or disciplines like tax, management accounting or software implementation. So before engaging their services, it is important to find out their areas of expertise.
Generally, accountants translate your books into financial accounts and complex accounting adjustment entries. Accountants who are registered tax agents will also prepare your tax returns.
Compared with bookkeepers, accountants are more focused on reporting and analysing, as well as interpreting data and business procedures.
A changing landscape
If you use accounting software and cloud-based systems such as QuickBooks Online, you may find that a bookkeeper can perform some financial reporting tasks without the help of an accountant.
However, accountants can still add value to your business by advising on areas like:
– Cash-flow management
– Identifying key performance drivers
– Strategic planning
– Risk management
– Tax planning
– Estate planning
Who should you choose?
The answer is likely to depend on the complexity of your business, your industry and the help you need. As your operations grow, the timely advice of an accountant becomes more critical.
However, since accountants’ fees are generally higher, a popular approach is to engage a bookkeeper for everyday tasks and an accountant periodically for specialist advice.
The right professional can help you conquer financial-management issues. Begin your search with clarity on the business challenges you face and you will ultimately get more bang for your buck.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.