An Accountant and Bookkeeper are often confused to be similar in meaning and even intertwined. Whilst both roles contain elements of the other Accounting and bookkeeping do differ, but they work hand in hand in providing the best financial services to businesses. The truth is, they offer different kinds of services and are usually combined to come up with better outcome. And it is the best relationship between the bookkeeper, accountant, and client that makes business environment and the life of everyone in it simpler and easier.
In a general sense, the daily functions of a business can be executed by bookkeepers at lower rates when compared to the rate paid to accountants including BAS returns, Accounts Receivable, Accounts Payable and Bank Reconciliations. Bookkeepers have an option to notify and defer recording complicated transactions beyond their knowledge and skill level for a tax agent or accountant. Note that accountants better understand taxation law and generally get the best possible outcome for their clients when it comes to large capital purchases, lowering taxable income, and business structure.
Bookkeepers are able to raise any issues with the business accountant year round rather than having to wait until the end of the year. In fact, a business’s financial records for the fiscal year will be as accurate and organised as possible provided that the accounts were prepared by a knowledgeable and experienced bookkeeper rather than by someone who has no know-how and/or experience. Managing a business’s accounts in this manner makes sense financially as the fees differ significantly between bookkeepers and accountants. Consequently the accountant’s time will be freed up so they can perform their other role of being financial advisors as they work with their client in strategic planning, cash flow budgeting, and business expansion. The accountant’s ability to fulfill their role strongly relies upon the bookkeeper taking good care of the daily base compliance and accounts.
When it comes to the question of whether an accountant or bookkeeper should be hired for a business, the answer is both. But there are a number of factors you need to consider when considering what your business will require. The kind of industry as well as the level of expertise that a company requires needs to be carefully considered. The structuring of a business’s services as well as where in the industry the business fits: is it at the luxury or budget end of the market.
The most important factor which will be considered is the financial position of the business at the point in time a decision needs to be made about the bookkeeping and accounting services. After considering these factors you will be best equipped to make a decision as to what your business bookkeeping and accounting requirements are to ensure the best outcome for a business.
Take into consideration the fact that accounting itself serves as a language on its own sense. This means that the staff or consultants you hire need to have a thorough knowledge of bookkeeping and/or accounting so they are able to easily explain concepts to the business manager. Whilst bookkeepers and accountants are typically labeled mundane or boring it is very important that they are transparent and honest in all business dealings and ensure information is shared where appropriate with other internal and external stakeholders. Most bookkeepers and accountants are very accommodating and willing to answer any questions you would like to raise or any confusion that requires clarification. Often bookkeepers and accountants take satisfaction out of seeing the expansion of a business and for their clients to fulfill their business goals.
It is advisable from the moment you start your business to consult a bookkeeping or accounting professional as early as early as possible. This will help you to sort out information and data from the beginning so you do not encounter huge compliance and/or operational problem that may hamper your business’s ability to function. Such an approach will provide your business with the personnel and the business fundamentals that will help to ensure your business is not just successful today, but for years to come.