Bookkeeper or an Accountant?
A bookkeeper or an accountant. Which one should you choose for your business?
A bookkeeper is often referred to as an Accountant, however, the two have very different. However, they each have key roles in the accounting process. Businesses require accurate and timely accounting information to make informed business decisions. This information is prepared and documented by bookkeepers FOR accountants. These separate roles are discussed below.
Roles and responsibilities of a bookkeeper
The bookkeeper (also known as an accounts clerk) focuses on daily/weekly/monthly accounting tasks, providing information but usually not opinions. They maintain the accounting system and record the business’ financial transactions. They ensure that accurate and timely financial information is provided by the accounting system.
The roles and responsibilities of the bookkeeper include:
- processing invoices, adjustments, receipts, payments and other financial transactions
- maintaining the organisation’s accounts and preparing management reports
- monitoring and managing amounts owing by debtors (accounts receivable) and owing to creditors (accounts payable)
- processing and maintaining the payroll system
- reconciling the accounts and preparing reconciliation reports
- preparing statutory reports required by governments and other regulatory bodies
- preparing financial statements.
- establishing and maintaining accounting systems and work processes.
- business establishment services.
- business system design and advice services.
In Australia a bookkeeper CANNOT prepare your BAS returns unless they are a qualified and registered BAS Agent. A bookkeeper cannot prepare your tax returns for you, or your business.
When a bookkeeper maintains the accounting system properly, the information provided to the users of the system allows them to make accurate decisions relating to the financial affairs of the organisation. When a bookkeeper fails to perform the bookkeeping functions accurately and in a timely manner, the financial information provided to management is likely to be inaccurate or incomplete.
Organisations may employ bookkeepers or they may outsource the bookkeeping functions to a bookkeeping service. They work closely with the accountant, providing them with critical information required to complete their duties.
Bookkeepers work closely with a business, often interacting with them daily. This provides bookkeepers with a unique insight into the business, making them a key business advisor for most businesses.
Cost of a bookkeeper
A contract bookkeeper in Australia who is providing a full range of services may charge between $55 and $120 per hour for their bookkeeping services.
Roles and responsibilities of an accountant
An accountant’s role, in addition to being capable of performing the duties and responsibilities of a bookkeeper, is to oversee the work performed by the bookkeeper and to provide interested parties with analysis and interpretation of the information provided by the bookkeeper.
Accountants also provide specific services for interested parties, including:
- business establishment services
- corporate reporting and compliance services
- audit services
- management accounting services
- financial management advisory services
- taxation advice and planning services
- insolvency and reconstruction services
- systems design services
- trust account and superannuation fund services.
An external accountant often only interact with the business once or twice during the year (usually at tax time). They may not know the business as intimately as the person maintaining your books.
Cost of an accountant
An external Accountant in Australia is likely to charge upwards of $130 per hour. One of the key differences between a bookkeeper or an accountant.
Should you use a bookkeeper or an accountant?
One of the main benefits of using a bookkeeper is that it frees you up to concentrate on your business, or other ‘lifestyle’ activities. While an Accountant can meet your day to day accounting requirements it is far more cost-effective to employ a bookkeeper and have your tax accountant oversee the work of the bookkeeper. By using a bookkeeper you can be confident that your accounts are up to date and accurate in time for the end of financial year. This makes your tax accountant’s job much easier which should reduce the cost of preparing your annual tax return.
This post comparing the cost of employing a bookkeeper and contracting the work to a bookkeeping service, may be helpful in your decision making process.
If you have thoughts or questions regarding this post, we would love to hear from you. Please comment below.
The Australian Department of Industry, Innovation and Science provides an excellent overview of the various financial professionals available to small businesses and differences between them.