What is the difference between a bookkeeper and an accountant?
A common misconception in administrative work is that accounting and bookkeeping is the same thing. While they are both vital to your finances, accounting and bookkeeping may be the different sides of the same coin. To begin with, it is important to understand that skilled bookkeepers and accountants is one of the foundations of a good business. Their tasks may overlap sometimes but there are some aspects in your operation that an accountant can only work on and same as with a bookkeeper.
A bookkeeper will likely be the one who will be assisting you with the recording, storing and retrieving of all your business transactions. All the money that comes in and out of your business will be tracked by a bookkeeper. However, an accountant will be the one who will be analyzing all the raw data that the bookkeeper will produce and generate a report from it. An accountant should have a deep understanding with taxation requirements and most likely to discern the financial health of the business.
To easily understand more these administrative positions, it can be helpful to know their tasks and responsibilities.
General tasks that bookkeepers do include:
Processing invoices, receipts, payments, and other financial transactions
Processing and maintainingyour payroll system
Preparing initial financial statements
Reconciling accounts and preparing reconciliation reports
Managing your accounts receivable and accounts payable, i.e. amounts owing by debtors, and amounts owing to creditors
Calculating VAT
Preparing and lodging your BAS
Designing, establishing and reviewing accounting systems
While Accountants is also qualified to do some bookkeepers tasks, their jobs are mostly inclined to advisory and analytical. They can offer financial projections, analysis in past performance and advice on the financial side of the business.
Some of the highlights of an Accountant’s duties include:
Taxation advice and planning
Business establishment assistance
Auditing
Corporate reporting and compliance
Superannuation fund advice
Financial management advice
While not an exhaustive list of an accountant’s services, the tasks outlined here serve to highlight the analytical and advisory nature of their position.
Given that there are substantial differences between the services offered by bookkeepers and accountants, it can be seen that both are important to the growth of your business. Instead of viewing them in a ‘bookkeepers vs accountants’ situation, it is important to understand that your accountant and bookkeeper work best together to serve the financial requirements of your business.
