Bookkeeper vs. Accountant: What’s the Difference?
One of the most common questions I’m asked is, ‘What’s the difference between a bookkeeper and accountant?’ Many people think they are just different names for the same service, but they are in fact two very different things.
An accountant and bookkeeper share a common goal to support your business and help it succeed financially, but they achieve this in drastically different ways. In today’s blog post I’ll explain the key differences between bookkeepers and accountants, so you know exactly what kind of support you need.
The role of a bookkeeper
In very simple terms, bookkeeping is the act of recording the day to day financial transactions of a business. It is an essential aspect of accounting.
Businesses of all sizes generate a great deal of financial paperwork, including invoices, receipts and expenses claims. It is a bookkeeper’s job to transform this paperwork into an orderly and highly accurate record.
Bookkeepers may also perform additional accounting tasks such as preparing and filing self-assessment tax returns, preparing VAT returns, and running payroll.
Why you might need a bookkeeper
Many business owners find keeping accurate financial records a daunting and difficult task. It can be hard to know exactly what to record, and how. If you feel overwhelmed by bookkeeping, or you’ve gotten behind with your financial admin, you need a bookkeeper.
A highly trained and certified bookkeeper will reduce stress and free up your time so you can get on with other important tasks. They may even save you money in the long term.
Do you need a bookkeeper? Read this blog post to find out.
The role of an accountant
An accountant provides high-level support using the financial information compiled by a bookkeeper or business owner. Their main roles include producing financial reports, filing tax returns and advising business owners on financial matters.
An accountant will make sure your business is profitable, and if not, will look at ways to cut costs. They help business owners strategically plan and manage their business.
Why you might need an accountant
An accountant will help with budgeting, forecasting, decision making and strategic planning – something that many business owners struggle to do on their own. Think of them as a business partner whose sole job is to ensure your company thrives financially.
You can hire an accountant wherever you are in your business journey, but be sure to hire one with experience in your industry.
As you can see, the differences between a bookkeeper and accountant are quite vast. Both work to ensure your business is financially compliant and successful, but they each offer a unique set of services and skill. You may decide to hire one or the other, but many companies choose to work with both. Ultimately, it depends on your individual needs.