Bookkeeper vs Accountant

by | Sep 29, 2020 | 0 comments

What is the actual difference?

If we had a dollar for every time we were asked “what is the difference between a bookkeeper and an accountant?”, we would need a bookkeeper to manage the money we’d be making. Don’t get us wrong, we welcome the question and appreciate it starts the conversation with a lot of people. We did, however, think it’s time we put it in writing so it’s here for those who might be too afraid to ask.

There is no sugar coating it, we know there can be a misconception that bookkeeping and accounting are basically the same thing. And whilst they both work to assist in all things finance-y, there are some essential differences between the services provided by a bookkeeper and an accountant.

It’s worth acknowledging that both bookkeepers and accountants play an instrumental role in any successful business. And whilst the tasks of both can often intersect, there are clear aspects of your business that you would handball to a bookkeeper, and others that you would give to an accountant.

So we don’t lose you, here’s a quick break down of the typical services on offer from the two;

Bookkeeping

  • Produces invoices and receipts
  • Records payments, and other financial transactions
  • Processes and maintains payroll systems
  • Reconciles accounts and prepares reconciliation reports
  • Manages accounts receivable and accounts payable, i.e. amounts owing by debtors, and creditors
  • Calculates GST
  • Prepares and lodges BAS
  • Establishes, and reviews accounting systems

Accounting

  • Taxation advice and planning
  • Business establishment assistance
  • Auditing
  • Corporate reporting and compliance
  • Forecasts business trends and opportunities for growth
  • Superannuation fund advice
  • Financial management advice

In summary, bookkeeping is responsible for the recording of financial transactions to ensure your business is running smoothly and efficiency. Accountants will typically take care of interpreting, classifying, and summarizing the financial data.

Get in touch with IM Business Solutions, your bookkeeper located in Perth, should you need any bookkeeping services or advice and support for your business.

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