Accountants and bookkeepers...both integral in helping your business be the best it can be, but what's the difference between them?
Ahh yep, that old chestnut. Accountants and bookkeepers...they’re the same right?
WRONG!
When it comes to the difference between the roles, it can be simply put as this. Bookkeepers are mainly responsible for getting the data in correctly, while accountants are mainly responsible for getting the data out correctly. So, let’s dive a little deeper!
The Bookkeeper
Really, a bookkeeper is the architect of the small business world. They meticulously track every transaction that passes through your business so that the numbers you see are accurate and up to date, helping you make informed decisions on a regular basis. While what a bookkeeper does comes in many shapes and sizes depending on your business, and whether your bookkeeper is internal or external, here’s the gist of it.
- Bank Reconciliations
Ooo that’ll scare a few that heading. Often thought of at the core of what bookkeepers do, bank reconciliation is the term given to accounting for every dollar that passes through your businesses bank accounts. This is one that’s easy to fall behind on, however not for a bookkeeper. They’ll make sure this critical task is done and kept up to date, matching transactions on your bank statements to those on your books and detect any differences and find out why they don’t match.
- Payroll
You know how you get paid every week, fortnight or month? That’s probably a bookkeeper getting that moola into your account!
- Customer Invoices
Bookkeepers also sometimes handle invoicing your customers! While not as common our next item, bookkeepers often are responsible for sending out stacks of invoices, and keeping track of who has paid what, and when.
- Supplier Bills & Receipts
Bookkeepers are known for helping to keep track of those pesky receipts, and if needed they will help you get your head around supplier bills and cashflow, making sure you don’t end up behind on a payment!
- A wee bit of compliance
A bookkeeper who is registered as a BAS agent can also prepare & lodge your BAS, file your Single Touch Payroll, and prepare your TPAR (Subbies Annual Report). They can also help you prepare SGC forms should you fall behind on your super payments.
In essence, a bookkeeper lays the groundwork for financial stability in your business, giving you accurate and up to date info to help you make decisions...which is where the next cog jumps in, the accountant!
The Accountant
So the bookkeeper focuses on the day to day...when it comes to big picture stuff, that’s when the accountant steps in to give you a hand. Using the data provided from the bookkeeper, they look and leverage that to help offer expert insights, make decisions and ensure you’re compliant with the rules. They number crunch, but they also do far more than just that!
- Analysis
Wondering what all those numbers in those columns might mean for you? This is where you consult with your accountant. They use these to assess your business's financial position, performance, and look to find trends and point out areas of improvement, especially if things might not be going as well as you hoped so they can get you back on the right track.
- Tax Planning & Compliance
The bigggg one for small businesses! Accountants are superstars at helping plan for tax and allowing you to know what's going on when it comes to taxes! They'll be able to guide you in this very important space, while also making sure you stick to the rules and lodge everything on time and correctly (think income taxes!)
- Reporting
The only person who knows your business better than yourself, is your accountant! So why wouldn’t you want them giving you the best indication on where things are heading through preparing financial statements and cash flow reports.
- Advisory
Looking beyond the numbers in your business is key to success, and advice from your accountant who has probably seen everything under the sun is a huge area of help. They can assist you with budgeting, forecasting and decision making, helping you drive growth and not only growth, but sustainable growth that leads to profitability.
So, an accountant plays the role of a strategic partner, helping use your financial data to guide you and help you make successful decisions in your business.
In the end, while they both play different roles, an accountant and bookkeeper work in tandem together. Through accurate data keeping, informed decisions are made. Understanding each side of the coin (money pun intended) helps you unlock the full potential of both an accountant and bookkeeper in your business.
Wondering if it’s time to pair the two together? Well, we’re lucky enough to have both sides covered off! So reach out for a chat to see how a bookkeeper can benefit your business, or, how an accountant can help decipher your bookkeepers numbers and break them down for you!
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