The two terms are used interchangeably, and the truth is, if you aren’t in finance, studying accounting, or running your own business, you mightn’t care too much about the distinction between a bookkeeper and an accountant.
But we think it’s important to know that while similar (and overlapping), the roles of a bookkeeper and accountant do, generally, differ.
Perhaps most importantly, the two roles also work together to improve the way a business manages, records, and monitors its cash flow, as well as abiding by tax obligations.
A bookkeeper – as the name suggests – literally “keeps the books” but today, many bookkeepers offer a number of additional bookkeeping and accounting services than just data entry. A suite of services from the bookkeeper can lessen the strain placed on an accountant. There’s no clear distinction between the two – the overlap progresses naturally as both your accountant and bookkeeper works towards financial compliance and success within your business.
How a bookkeeper and accountant work together
It’s not a matter of choosing one over the other.
In fact, your bookkeeper and accountant work in tandem in order to give your business the best opportunity to grow.
It’s the overlapping support net they weave that helps your business fulfil its daily and long-term financial goals and obligations.
The main question you probably want to ask is, Do I need an accountant, a bookkeeper, or both?
Think of it this way: an accountant and bookkeeper have the same end-goals when it comes to a business’ finance, but they are both crucial at various stages of the financial cycle. While the bookkeeper is responsible for correct and accurate data entry, it might be up to the accountant to manage tax issues. The bookkeeper and accountant must be communicating regularly to ensure everything is being recorded correctly.
Communication between the two is paramount. Without it, questions are left unanswered and errors can slip through the cracks.
Who does it? Accountant vs. bookkeeper
Processing invoices and receipts
This day-to-day task might seem menial and tedious to you, but it’s imperative that each business-related purchase is accurately recorded and the receipt is adequately stored. A bookkeeper would manage this task.
Processing and managing payroll
Payroll management is a crucial part of your business. It ensures employees are not only paid on time, but correctly, too. The correct amount of tax and super must be taken from pay, and net pay is deposited into your employees’ bank accounts. A bookkeeper helps you process and manage payroll.
Importing goods? You better correctly add GST to those goods. A bookkeeper can help you here!
Preparing your BAS
Depending on your business type, you will be required to complete and submit a BAS lodgement either monthly, quarterly, or yearly. Your bookkeeper will prepare and lodge your BAS correctly and on time.
You should engage an accountant who can provide you with tax guidance and advice. Their strategy should be based around growing your money.
An audit involves closely examining a business’ entire financial situation and ensuring the business is compliant across all degrees of finance including tax, superannuation (see below), GST, payroll, and more. Your accountant can prepare and complete a basic business accounting audit.
Superannuation helps employees save for their retirement, and is an important part of routine payroll management. An accountant will help your correctly assign funds to employees’ superannuation accounts.
Accounting compliance is a service offered by accountants and bookkeepers to help businesses meet a variety of financial needs and obligations.
Bookkeeping from Melbourne’s Maximum Business Solutions
Maximise your time and your accounts with expert bookkeeping and account management from Melbourne’s Maximum Business Solutions.
More than just bookkeeping, we offer a range of add-on services from payroll processing and business compliance, working in conjunction with your accountant as needed.
Are you looking to outsource your business’ bookkeeping needs? Contact us today.