I am frequently asked this question because most business owners don’t know whether they need just one or both professionals for their business and what service each will provide to them. Of course every bookkeeper and every accountant has different abilities, skills and knowledge so what may be true of one bookkeeper or accountant may not be true of another that you approach.
A simple explanation of bookkeeping is:
“the maintenance of financial records to record income and expenses and calculate the profit or loss of the business, including filing of paper and/or electronic copies of all related business documents to support the income and expenses of the business.”
A bookkeeper will deal with some or all of the day to day financial transactions of a business from raising sales invoices to paying the bills, from chasing payment to filing the VAT return. There is a myriad of tasks that a bookkeeper can and will undertake to enable the day to day smooth running of a business. A bookkeeper will be able to review and understand the accounts and produce relevant management reports for the business which they will be able to explain to the business owner.
An accountant will generally oversee the accounts. They may only see the accounts once per year after the year end when they produce the statutory accounts for your limited company or your tax return if you are a sole trader or partnership. Accountants generally work with a large number of businesses and therefore will have a wide range of experience in matters which affect your business and may be able to give you tax advice and support you with business planning to aid the growth of your business. Some accountants will offer regular business support throughout the year and some will also offer bookkeeping support.
Whilst bookkeepers do not have to have a qualification (although it is much better if they do as it shows they have taken the time to study and gain knowledge) an accountant should be qualified and be registered with an accounting body.