Accountant vs bookkeeper– the terms can be confusing for anyone who doesn’t work in the financial arena. And, of course, it is critical that a business, especially a small business or start up, make the right choice to handle both their financial needs and remain within budget. How do you know which is the best route for you? Here’s our tips.
Difference between a bookkeeper and an accountant.
Many people tend to think of a bookkeeper as a ‘baby’ accountant. This isn’t really a wise route, as the two are actually different careers. Bookkeepers are set to handle the daily nitty-gritty of finance. They use the journal and general ledger to record transactions for the company. There’s often accompanying financial software that goes with this role.
The bookkeeper, in short, generates information and data about the financial position of a company. So how does the accountant fit in? Their role is to take that data, and withdraw pertinent information from it. They will begin by, of course, verifying all data they are given, and from their will set about the process of generating reports. This analysis and information can be used for a variety of things- cash flow, business trends, information and reports and more. Think of the accountant as the ‘big picture’ seeker to the bookkeeper’s ‘nitty-gritty details’.
So which finance professional is right for me?
Obviously, we can see clearly that every company- absolutely every company- needs a good bookkeeper. Keeping that daily information in check is a critical component of the financial processes of any business. Some small entrepreneurs opt to do this themselves, but it’s an arena where many people end up making costly mistakes. Either slips are not recorded and deductions are missed, or chaos begins to reign very quickly as work does not get done. The services of a bookkeeper are probably a wise choice for all but the most dedicated business owner.
From time to time, the progress of the tax year and employee law will drive you to need the services of an accountant, too. They will general take the information compiled by you or the bookkeeper on a regular rota- usually weekly, quarterly or monthly- and compile from there the statutory necessary reports you may have.
So, in the end, you do need the services of both an accountant and a bookkeeper. If you are diligent, or can afford a staff member or small team in-house, you can of course handle the bookkeeping functions yourself. Many firms will do this using software advised by their accountant, making the data collection process simple for them and ensuring full compatibility. It is usually wise not to attempt to fill the role of accountant unless you have experience in this role.
Keeping your financial affairs in order is a critical component of business. If you are looking to enlist the help of reliable and trustworthy bookkeepers in Melbourne, the team at www.bookkeperco.com.au are happy to assist.