Those of us who don’t work in the accounting departments and don’t dabble in the field of finance may assume that bookkeepers and accountants are the same thing. However, with the tax season upon us, it’s time to learn how to differentiate these two services, so you know whom to consult and when.
Although both accountants and bookkeepers do share some overlap in their duties, the role of an accountant extends further than that of a bookkeeper. In a corporate setting, an accountant may be expected to perform bookkeeping duties, but a bookkeeper is usually not trained to perform the more complex roles traditionally assigned to an accountant. Let’s try and answer some questions about these two roles.
What are the duties of a bookkeeper?
A bookkeeper records daily financial transactions. This means that they record any money coming in or going out (being spent) by a business. In the old days, bookkeepers would record transactions in various record books, giving them their name. Today however, these transactions are recorded in a computer software. Some of the things that bookkeepers record include invoices, receipts, claims and so on. Apart from this, bookkeepers also carry out the following duties:
- Keeping track of the payroll and making payments to employees at fixed times of the month
- Balancing accounts at the end of every financial term and reporting any irregularities.
- Preparing initial financial statements for the business.
- Managing your accounts payable and accounts receivable, including amounts owed to debtors and amount owed to you by creditors.
- Updating and managing the record system for transactions for more transparent and efficient record keeping.
What About The Roles of an Accountant?
An accountant’s role is an extension of the work done by bookkeepers. While bookkeepers generate the numerical financial data, accountants take this data and analyze it to look for patterns and trends, according to the requirements and standards of their employers. This analysis and its interpretation in the subsequent financial reports produced by the accountants will help the upper management make important decisions regarding the company and its performance.
Accountants also provide various consultation services and miscellaneous duties, such as:
- Helping you understand and plan for taxation
- Providing advice on how to set up a new business
- Providing advice on financial management
- Auditing the bookkeepers accounts
- Preparing corporate performance reports
- Advising on proper financial strategy
- Accurately filing tax reports and tax returns
Are There Any Similarities Between Them?
Both bookkeepers and accountants must have knowledge about keeping proper financial records so that your accounts are balanced by the end of a financial term. However, this is where their similarities end. The accountant may audit to ensure that a bookkeeper’s work is in order, but does not interfere with a bookkeeper’s duties. Instead, the accountant will depend on the information generated from a bookkeeper to produce analytical reports.
Can I do Without One or The Other?
Businesses usually need both to function properly. Both bookkeepers and accountants represent two very different scopes of work, even though they both belong in the financial department.
If you urgently require either both or one of these services, don’t hesitate to put up a request for a freelance bookkeeper or accountant to help you get things done. Start by tapping the button below to receive free quotes from professional bookkeepers or accountants.
written by Michelle Chee