What's the Difference Between a Bookkeeper and an Accountant?

What's the Difference Between a Bookkeeper and an Accountant?
  • Bookkeepers do not require a degree to do their job, in keeping and managing your business's books.
  • Accountants are professionals with a degree, who play a strategist and consulting role on your business finances.
  • Hiring an external accountant is an investment to avoid bad financial decisions and keeps you out of trouble with the ATO.

Aren’t bookkeepers and accountants the same thing? It’s a fair (and common) question. The short answer is no.

A lot of people get it wrong, not knowing that while there are similarities in the roles bookkeepers and accountants play within an organisation, their tasks and their vital functions are quite different. It’s certainly true that both accountants and bookkeeper share common goals in ensuring the smooth running of your company’s finances, and both are integral to your business.

However, while it’s important to recognise each of their individual functions – acknowledging that there can be some cross-over – there are a number of key differences you should understand before either taking on a financial role yourself, or finding a finance professional to assist you internally or on a consulting basis, in your own business.

First, let’s examine the roles and some of the key distinctions between the two.

What is bookkeeping?

Essentially, bookkeeping is the keeping of a company’s financial records; the recording of data.

Bookkeepers tend to form part of a business’ administrative staff and are not tasked with any broad decision making or strategy. If working independently or as a contractor, a bookkeeper will often consult an accountant for general professional advice.

What is accounting?

Accounting is the practice of interpreting and analysing the financial data being recorded and administered, generally by a bookkeeper or the business owner. An Accountant’s advice should help empower the business owner or management team to make business decisions that mitigate risk and add value.

An in-house accountant will play a pivotal role in a company’s management team, though in many instances it is more effective – and better value – to outsource the function to an external accountant or accountancy firm, which is able to provide a broad range of expertise, without the ongoing expense of employing someone full-time.

One important distinction to make is that accountants are not financial advisors.  Again, while they work in the same general field of finance – a financial advisor’s value and skill is in helping to grow your wealth through investments, whereas an accountant’s core function is to advise you in tax matters and how best to structure of those investments.

What qualifications do accountants and bookkeepers need?

Bookkeepers do not need to have a university qualification, however in Australia, if they want to launch a business of their own, they are required to hold at least a Certificate IV in Bookkeeping or a Certificate IV in Accounting, and be registered as a BAS Agent.

Therefore, a bookkeeper can be a ‘learn as you go’ role, accomplishing on-the-job training through data entry, administrative assistance, or account support. There are some groups which offer certification and ongoing education opportunities for bookkeepers. 

But unlike accountants, who are often hired for ad-hoc projects or on a contractual basis – in advance of end of financial year, for example, or to assist a business through a particular growth phase – bookkeepers are usually the ones who handle day-to-day functions for a business and are more of a permanent fixture in a company.

Meanwhile, accountants are university qualified professionals. They will likely have a broad skillset, and over time may develop specialist interest areas, industry focuses, or business types that they prefer to work with due to the nature of accounting work involved. They may focus their work with SMEs, for example, or on start-ups, manufacturing or logistics, or hospitality.

An accountant will typically have an undergraduate degree in accounting or a related field. Chartered Accountants (CA) and Certified Practising Accountants (CPA) would have undertaken further studies. Gaining a CA and/or CPA certification will distinguish an accountant from other business professionals and enhances their skillset – and appeal – for clients.

Accountants often work alongside bookkeepers, but it is more common for accountants to be hired outside the organisation as needed, as opposed to a bookkeeper, who is more often a permanent member of staff.

What does each role look like day to day?

1. Bookkeeping

A bookkeeper will likely be someone who aids with your business’s ongoing financial recording and transactions, and in doing so, should be helping to keep your business running smoothly. Their role is to oversee the ongoing financial upkeep of your business.

For a small business this may encompass a broad range of daily and weekly activities. Some tasks that are regularly undertaken by your bookkeeper can include:

  • Processing receipts, expenses, and other financial transactions
  • Processing and maintaining your payroll system
  • Managing Invoicing/Accounts Payable and Receivable
  • Processing payments
  • Daily/weekly balancing of ledgers, subsidiaries, and historical accounts
  • Reconciling bank statements/accounts and preparing reports on them
  • Production of reports and preparation of initial financial statements

Bookkeepers will often also be the ones who calculate GST, prepare and lodge your quarterly Business Activity Statement (BAS). Some may also assist with establishing and/or reviewing your business’s accounting systems. The list doesn’t end there, such is the broad definition of a bookkeeper’s roles and responsibilities, so they can be involved in basically any task that falls under the umbrella of a business’s financial activities.

2. Accounting

An accountant is responsible for analysing the data (generally produced by a bookkeeper, as mentioned previously). He or she is the one who interprets, and reports on it, and uses that information to inform and educate you on your business’s financial position, including – and vitally – profitability and cash flow.

Some of the key responsibilities of an accountant will include:

  • Preparing and adjusting entries (especially if the books show a discrepancy and require investigation or any special insight).
  • Analysing all the operational costs of your business.
  • Preparing financial statements as required.
  • Completing income tax returns
  • Helping to set and measure business KPIs with you
  • Highlighting spending or revenue patterns that may affect your business
  • Helping you to understand the impact of any financial decisions you want or need to make
  • Planning your tax affairs to minimise tax
  • Letting you know when you should seek specialist advice

They should be able to help clarify the often-complex volume of data and financials required to operate your business, to enable you to make better or at least better-informed decisions about the future of your business.

Accountants will have a strong understanding of taxation and are best positioned to provide advice about what your obligations and duties are in that regard.

What does each role cost, and do I need one or the other – or both?

We’ve already looked at the differing roles and responsibilities of bookkeepers and accountants, so the fees associated with each of the roles are going to aligned to their duties.

You need to start with a clear vision of who is going to be tasked with what, and find out what the associated costs are likely to be, to hopefully avoid overpaying for services you may not need.

If you take a bookkeeper on – either on contract or as an employee, depending on your  needs and the terms of their engagement – hourly rates may range from $21 to up to $50 for a variety of services, as outlined by service outsourcing site ServiceSeeking and also Payscale.com.

While accounting services are definitely going to be greater than the cost of a bookkeeper, the increased value they can deliver you in the long term – especially in time saving at your end – invariably makes the investment worthwhile.

In speaking with Business Insider in 2018, Matt Prouse, Head of Industry at online accounting software application, Xero, explains it well in that working with an accountant comes with “the benefits of less personal stress, more accuracy – and importantly, the opportunity for a smaller tax bill…[a] skilled accountant can spot inefficiencies in existing operations and missteps in your business planning before you make them.”

Guidance, not administration

The role of an accountant in your business, while potentially encompassing some bookkeeping tasks, is designed to be more consultative and analytical in nature, and so more valuable from a strategic point of view, than a bookkeeper’s will ever be.

Over time, your accountant will be in a position, through analysis of past performance, to offer financial projections and assist you with strategies to help you plan for the future of your business.

Some of the additional value-added services an accountant might be able to provide for you are:

  • Providing advice on taxation and planning
  • Assisting you even before you establish your business/advising on structures, etc.
  • Auditing, company reporting, and compliance matters

Ultimately, an accountant is responsible for helping you to understand the financial impact of the data gathered by a bookkeeper (or yourself, if you have taken on that role), and will then use that information to create accurate business forecasts and direct whatever changes are necessary.

With an expert accountant on your side, you will have a dedicated advisor who can help you define, plan for, and meet (and with any luck, exceed!) your business growth goals, and improve your overall operations.


Lachlan Grant

CEO at

Vital Addition provides accounting, financial, and tax advice and expertise that is fresh, honest, and reliable. As founding partner and CEO, I believe in empowering SMEs to make business decisions with confidence, and face the challenges associated with growth with informed optimism.


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