People often believe that Bookkeeping and Accounting are virtually the same things when in actual fact they do differ. While they both work to assist you with your finances, there are some important distinctions between the tasks of a bookkeeper and an accountant.
Bookkeepers and Accountants are both vital to ensure your business functions on a day-to-day basis and both are needed to look after your finances. While their tasks can sometimes overlap, there are definitely certain aspects of your business that you would specifically entrust to an accountant, and others that you would give to your bookkeeper.
Bookkeepers provide businesses with an on-going update and reporting of your business financial progress, incomes and expenses on a daily or weekly occurrence. Accountants tend to analyze the data reported by Bookkeepers and provide advice on that data in relation to tax obligations and tax returns. A Bookkeeper cannot lodge tax returns; you will need to be a registered tax accountant to do so.
Tasks generally completed by a bookkeeper can include:
- Processing invoices, receipts, payments, and other financial transactions
- Processing and maintaining your payroll system
- Preparing initial financial statements
- Reconciling accounts and preparing reconciliation reports
- Managing your accounts receivable and accounts payable, i.e. amounts owing by debtors, and amounts owing to creditors
- Calculating GST
- Preparing and lodging your BAS
- Designing, establishing and reviewing accounting systems
While an Accountant can also assist you with the above tasks, it is important to be aware that there is a substantial difference in fees charged by bookkeepers and accountants. In order to best utilize your budget, extensive consideration into which tasks are to be delegated to a bookkeeper or an accountant is advised.
Tasks an Accountant can assist you with also include:
- Taxation advise and planning
- Business establishment assistance
- Corporate reporting and compliance
- Superannuation fund advice
- Financial management advice
Given that there are substantial differences between the services offered by bookkeepers and accountants, it can be seen that both are important to the growth of your business. Instead of viewing them in a ‘bookkeeper’s vs accountants’ situation, it is important to understand that your accountant and bookkeeper work best together to serve the financial requirements of your business.
For Bookkeeping or Accounting advice please contact 1300 751 700 today!