If I had a dollar for every time I was asked this “what is the difference between a bookkeeper and an accountant”, I would have a lot of admin with my accounts receivables!
I posted last week about what a bookkeeper does, and why they are so crucial for your business.
Likewise, an accountant is also crucial to your business, as they provide a completely different set of skills and deliverables for your business.
What does a bookkeeper do?
A bookkeepers responsibility, whether you outsource it or do it yourself, is to ensure that all financial transactions related to the running of your business, startup, or company, are recorded accurately and in an organised manner to remove any room for confusion or error.
The end goal of this is to have all financial records available when any financial decision-making is required, such as financial advice for the business, requesting further funding from an investor, or simply for preparing the necessary information for your accountant at tax time.
Put it this way, without the accurate financial data about your business’ state you will find it impossible, and in fact crippling, to attempt to make any financial decisions whatsoever.
Imagine the situation where you are gaining so much momentum in your business and you gain attention from a group of investors who want to invest in your business but need to see your financial data!
*Types of financial reports bookkeepers can provide*
Types of financial reports bookkeepers can provide:
1. Cash flow reports
2. Profit and loss
4. BAS statements
What does an accountant do?
Accounts are able to take this financial data in the form of cash flow statements, to prepare tax reports, tax lodgements, and financial advice for your personal wealth and your business.
Do I need both a bookkeeper and an accountant?
As a bookkeeper it is not my job to give financial advice for your business or help you with your business tax. It is my job is to ensure the accuracy and organisation of your financial data so that someone else can do this for you!
Accountants are typically more expensive than bookkeepers so it pays to have your books in order to save the hassle and expense of having your accountant do the work.
Do I need an accountant at all?
Bookkeepers are not registered tax agents so they cannot do your tax returns for you and you do need to have an accountant do this for you, or, you can try to do it yourself which is an options some small businesses take.
Do I need a bookkeeper at all?
You can certainly survive up to an extend without a bookkeeper but ask yourself this “what could I be doing to grow my business if I had someone else manage my books”. This is an especially important question to ponder as your business starts to grow. You may decide to get a bookkeeper on board once you have hit a certain amount in revenue to help to justify the expenses.
As you become savvier with running your business this will become clearer and you will begin to see the benefits of these services. You can’t grow your business alone and we are here to help!