A question that we often get asked by people is what is the difference between us and an accountant? While there’s a lot of information out there on the web about this, we thought we’d do a little blog to try and help too!
Bookkeeping is essentially the recording of all the financial transactions within the business. Accounting is the interpreting, analysing, reporting and summarising of the financial data. So, without the bookkeeping step, the accounting cannot happen. While you’d think from this that bookkeepers will therefore handle the recording part while the accountants analyse, it’s not always that clear cut! The roles often overlap, with bookkeepers analysing and reporting on the data they’ve entered, both for client analysis and also as part of checking their work. Accountants can also create and modify data as part of their analysing, such as moving items from one account to another to help with tax liabilities.
Some accounting firms will offer a full service, where they perform both functions, however they’re often done by separate departments so it would still be a bookkeeper performing the bookkeeping role, the accountant doing the accounting and this situation is where you’d find less crossover in the roles, sticking to their defined areas.
Having a separate bookkeeper can be an advantage for many reasons. Either employing a bookkeeper or using an external one such as ourselves can be more cost effective than using an accountant alone. Giving your accountant a looked after and nurtured set of books makes their work easier, plus if they do have any questions, they can speak to someone in technical terms and get the answers they need easier. The bookkeeper can also generate reports using the transactions, handling some of the accounting process again in a more cost-effective way, plus knowing your business well will allow them to know what you need to know.
Bookkeeping and accounting can appear to some people as the same thing, as their both working with financial data. Some people, especially the self-employed, don’t even need an accountant, a bookkeeper can take care of all their requirements. We pride ourselves that we advise our customers honestly when we feel it would be beneficial to them to have an accountant work directly with them alongside ourselves, rather than trying to hide it! We work with a number of accountants who we can get help and advice from as required on your behalf when required, so starting with a bookkeeper is often a good starting place! They certainly wouldn’t end up costing you more than just going with an accountant!
If that’s still left you with questions, why not get in touch with your questions and we’ll do our best to help you.