Bookkeepers and accountants may sound like they have the same or similar role, and in many respects, they do perform some of the same tasks. But there are some essential differences between the two, and there are certain tasks and activities that only accountants can do. If you are thinking of enlisting the expertise of either an accountant or bookkeeper, then it pays to know what makes them different so you can get the right professional for your needs. Here, then, are the main differences between accountants and bookkeepers you should know.
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The Main Tasks Of A Bookkeeper
Bookkeepers are, as their name implies, the keepers of financial books. This means they are in charge of processing your financial transactions, and they will input these into a system like Freeagent or Xero. They can also be in charge of paying your business bills and sending out invoices to your customers. Most businesses deal with a lot of paperwork, and this includes expense claims, purchase invoices, and receipts. Your bookkeeper can transform your paperwork into a report that is orderly and organised and, more importantly, accurate. Some bookkeeping services or bookkeepers can also process VAT returns and manage your payroll as well as prepare and then file your tax returns.
The Main Tasks Of An Accountant
An accountant can help you handle more complex compliance requirements such as the filing of accounts as well as tax returns, and they can also advise you on how to strategically manage the finances of your business. An experienced accountant, such as the central London accountants from Griffin, Stone, Moscrop & Co, can help conduct tax planning for you so you can minimise both your business tax liabilities and personal taxes as well. They can also give you premium advice on the management of your cash flow. You can consult with your accountant regarding your ideas for your business, and they can even introduce you to other service providers who can fulfil your requirements.
An accounting firm will often have an entire team of professionals who can provide you with varying levels of expertise and services, and they can provide you with their services year-round since they have a larger team of experts who can take over when others are on holiday or busy with other tasks.
Other Differences
Bookkeepers can work on your books on a weekly basis or every fortnight or month, but the frequency of your requirements for your bookkeeper will depend on your business’ complexity and size as well as how you want your financial paperwork and records to be updated.
Accountants generally attend to your business less frequently; for instance, for your VAT returns every quarter or for your annual accounting. You can involve them in more complex and special projects during certain periods, such as working on your business plan or forecasting your cash flow.
Experience And Qualifications
Bookkeepers don’t need precise qualifications, but many of them will be listed with the ICB or Institute of Certified Bookkeepers, IAB or International Association of Bookkeepers or ATT or Association of Tax Technicians. Accountants, on the other hand, study for any of the Chartered Accountancy Institutes in the UK, which include CIMA, ACCA and ICAEW.