Should I Get A Bookkeeper Or An Accountant?
Chances are you’ve heard of an accountant, and you’ve also heard of a bookkeeper. But what is the difference between the two, and which one should you hire for your business?
Bookkeepers and accountants both work with financial data. The primary difference is that bookkeeping is more of a record-keeping function, while accounting is the process of preparing financial statements and tax returns and analysing financial information.
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What can a bookkeeper do for you?
A bookkeeper’s job is to keep track of your business finances, income, and expenses. They can also prepare some financial reports and fulfill other accounting functions.
A bookkeeper is a key role within financial services, as they are responsible for recording day-to-day transactions. Everything a bookkeeper does is based on the premise that their records will be used to prepare tax returns and statutory accounts, so it’s crucial that they are accurate.
Bookkeepers have knowledge of different accounting rules and an understanding of taxes so that they can record things correctly. They can also provide various reporting, do VAT returns, specialise in accounting software, and assist accountants with other jobs.
Because of a specialist knowledge needed, we need to stress here that this isn’t an admin job. We’ve seen records maintained by people who only specialise in the admin without bookkeeping experience and qualifications and correcting mistakes usually costs businesses lots of money. An admin person and their great organisational skills can, however, be of a great assistance to a professional bookkeeper.
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What can an accountant do for you?
Accountants are the ones you call when you want to get the most out of your business and financial situation. They can help you create a business plan, find ways to minimise your tax liability, and assist with VAT returns.
A good accountant will offer more than just numbers, they’ll help you to make better decisions about how best to invest in your business. Accountants can also be invaluable if you’re thinking about selling your company.
It’s important to keep in mind that your business needs will vary from those of other businesses. It’s not always clear whether you should hire a bookkeeper or an accountant, so it’s good to know the differences between these two roles.
Bookkeepers are generally better suited for smaller businesses (those with fewer employees and less complex financial reporting requirements), while accountants are usually found in larger firms and provide more services overall, such as tax advice and business planning advice. Accountants may also be able to provide financial guidance when it comes to managing your books properly.
Can I hire one person to do both bookkeeping and accounting?
In some cases, accountants also provide bookkeeping services. If it’s a small accounting practice, the same accountant may do both bookkeeping and accounting as bookkeeping is in fact an important part of accounting.
In accounting practices where there’s more than one person in a team, the tasks can be split and one person will be doing bookkeeping tasks and someone else will be responsible for, for example, tax advice and year-end accounts. Having that variety of skills works well within bigger accounting practices as a segregation of duties can help with spotting mistakes that can happen like in any other profession.
Here at Joanna Bookkeeping, we know that having your finances in order is key to running a successful business, but it’s hard to find time between all the other tasks you have on your plate. That’s why we offer our services so that you can focus on what’s most important: growing your business.
Book a FREE call and have a chat with our Oxford-based accountants to learn more about how we can help your company succeed. PLUS – because we’re fully digital, we offer services to businesses all over the UK!
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