What is the difference between a Bookkeeper and an Accountant?

One of the biggest misconceptions in the financial world is that bookkeepers and accountants are the same thing. Yes, they both can help businesses of all shapes and sizes by providing them with valuable advice on how to handle financial matters, and yes, they both do have tasks which overlap, but they are in fact two very separate roles.

What do bookkeepers do?

The role of bookkeepers is to organise and maintain the day-to-day running of your finances. This can range from processing invoices, receipts, payments and transactions to providing credit control e.g. keeping an eye on which clients have been paid and chasing those that haven’t.

Similarly, they are key to other aspects of your business:

  • Processing and maintain your business payroll system
  • Preparing financial statements (the initial parts)
  • Reconciling accounts and preparing reconciliation reports
  • Paying invoices that your business owes

To put it more simply, bookkeepers ensure your business finances remain up to date and in order by maintaining your financial information. This information is then passed onto your accountant whose job is to provide you with more detailed financial advice and support.

What do accountants do?

You could say accountants are the next step up from bookkeepers as they take the information supplied by bookkeepers and then analyse it. From here they are able to create reports that they can use to give you professional, in-depth and detailed financial advice.

On top of this, accountants also have a thorough understanding of tax, the tax systems and its requirements. Many actually choose to specialise in a particular aspect of accounting so that they can effectively translate any changes in rules and inform you on how they may affect your business.

Alongside advising you on your tax liabilities, accountants also provide advisory and analytical support in the following areas (depending on what parts of accounting they have chosen to specialise in):

  • Raising funds, investments and assistance in other financial services
  • Auditing
  • Corporate planning and compliance
  • Pension advice and planning
  • Financial management advice
  • Plus many more services

Do you need both?

This depends on you, your own personal preferences and how complex the financial status of your business is.

For instance, if you have got a large business, then it may be wise to hire a bookkeeper (either as an employee or on a freelance basis) as they can ensure that your business stays up to date and organised. From dealing with your invoices, paying bills and tracking payments, to maintaining cash flow; they can help to keep your business on top.

Accountants are also invaluable as they can help you to save on your tax bill; make sure you fulfil your tax obligations, and attain a healthy profit. In fact, by analysing the financial nature of your business and understanding its value, they can help you to drive your business forward.

In other words, both can bring value to your business!

So if you are interested in giving your business the financial support and advice it needs to remain profitable, then we recommend adding both to your team.

Alternatively, if you’ve got a natural passion for numbers and have got the time to maintain your own accounts; then enrolling onto an online bookkeeping course can help make this passion a reality.


Like this article? Spread the word

New Year – New Career – New You

For most of us, the New Year spells a long list of resolutions that we rarely fulfil. But what if this year, you made a list that was realistic and achievable? What if, instead of the traditional ‘lose weight’ pledges and ‘join the gym’ wishes, you picked something that deep down you’ve always wanted to

What is the right job for you?

We’ve all thought it: ‘What do I want to do when I grow up?’ We sit and wonder what job we want to do, and what career path is best. And it is natural to wonder as in most cases, you will work in this field for the rest of your life. But how can

Studying tips for the school holidays (Part One)

Learning from home comes with many advantages. The flexibility to learn when, where and how you want.  No classrooms, a healthy work-study balance YET one of the hardest things you will encounter is trying to study in the holidays – especially if you’ve got children. Naturally, you want to spend time with your family and

Top 5 jobs for confident people

Some jobs are better suited for certain personalities than others. Not because you can’t do them, with the right drive and willpower you can do anything you put your mind to, but because some jobs will help you to flourish better than others. In this post, we shall put this theory into practice and explore

Can positive affirmations help you to prepare for a job interview?

Last week we talked about the idea of positive affirmations and how they can help you to eliminate negativity and change your mindset. Now, typically this kind of practice is used to improve self-esteem, confidence and your body image. Yet as we learned last week it is possible to tailor positive affirmations to help you

Comments (0)

Join the conversation

Your email address will not be published. Required fields are marked*
What’s on your mind?*
Your name*
Your email*