Just because they both involve numbers doesn’t mean that bookkeeping and accounting are one and the same. In fact, both are completely separate professions, with different skill sets and competencies!
If you ask us, bookkeepers and accountants are like fish and chips: two vastly different things that perfectly complement each other.
When it comes to your business, both bookkeeping and accounting are crucial for a smooth, functional and financially-healthy business.
So, how do both of these professions work together to keep your business afloat?
What your Melbourne bookkeeper does
When it comes to your business finances, your bookkeeper’s role is to keep records.
In terms of the work we do, bookkeepers are in more of a “boots on the ground” position than your accountant. We deal with the numbers that matter on a day-to-day, operational level.
Our focus is on ensuring that every single business transaction is recorded, categorised and reported on.
- Cash flow
- GST statements
- ... and more!
In short, bookkeeping is retrospective - it looks backwards at what has happened, and reports on it.
While it might sound counterintuitive, past performance is important to track. For starters, it can help identify trends, as well as one of the best indicators of how your decisions are affecting your business.
By contrast, your accountant focuses on...
If bookkeeping is all about the day-to-day, then accounting is all about the big picture.
Your accountant focuses on helping you to set a direction for your business.
Armed with accurate numbers about your business’ financial performance, accountants focus on helping you make decisions and achieve your business goals.
In addition to simply reporting, accountants focus on interpretation - their job is to summarise, interpret and communicate your business finances, and help you make critical business decisions.
That can include assisting with:
Additionally, accountants are also responsible for compiling many of the more complex financial reports, including:
- Loan proposals
- Balance sheets
- Business tax returns
In short, accounting is all about the high-level figures and numbers.
And this is reflected in how often you see your accountant. While most business owners keep in regular contact with their bookkeepers, many only ever talk to their accountant a couple of times a year.
The relationship between your bookkeeper and accountant
After reading the different roles of your bookkeeper and your accountant, it can be easy to assume that your bookkeeper is the bassist to your accountant’s vocalist.
This couldn’t be further from the truth!
While your Melbourne bookkeeper may focus more on the minutia, that doesn’t mean our work is any less important. In fact, both professions are essential if you want to maintain your business’ financial wellbeing.
That’s because without bookkeepers, your accountant’s job would be harder.
Good bookkeeping gives your accountant the figures they need
Your accountant is responsible for creating plans, budgets and proposals for your business.
These are based on the figures and financial data collected and provided by us, the bookkeepers.
Bookkeeping frees up your accountant
Even with the aid of computers and cloud bookkeeping, your accountant can’t do everything on their own.
If they had to look after monitoring day-to-day transactions too, they wouldn’t be able to focus on their strengths.
Bookkeepers can identify issues before they become too big to avoid
Since we work with the day-to-day figures, your bookkeeper is in the best position to report on the financial health of your business.
As such, we can identify problems and even provide suggestions, allowing your accountant to focus on what they do best!
Need a Melbourne bookkeeper?
While some smaller businesses can get away with not having their own accountant, if you ask us a professional bookkeeper is absolutely essential, regardless of industry or size.
Need a bookkeeper in Melbourne?
You need Maximum Business Solutions!
Our team of experienced Melbourne bookkeepers provide comprehensive bookkeeping services for all sorts of businesses.
We work closely with your accountant to ensure that your finances are in order and that your business is in the best financial health.