BOOKKEEPER OR ACCOUNTANT: WHICH ONE DO I NEED FOR MY BUSINESS?
Do I need a bookkeeper or an accountant?
This is a question on the minds of many small business owners trying to keep on top of their finances. So if this is you, you’re not alone. But, the answer may not be what you think. In actual fact, you would benefit from hiring both.
Whilst the terms ‘bookkeeper’ and ‘accountant’ are often used interchangeably, they actually perform very different roles. Put simply, bookkeepers manage day-to-day tasks and maintain financial records whilst accountants complete your year-end accounts and other such duties.
What is the role of a bookkeeper?
If you have a pile of receipts building in the corner of your office and outstanding invoices, then you need a bookkeeper; they maintain your financial records. Among other tasks, a bookkeeper will file receipts, pay suppliers, chase unpaid invoices, reconcile accounts, manage payroll and complete self-assessment tax returns.
Bookkeepers work with financial software, such as Xero or Quickbooks, to ensure your accounts are up to date, accurate and ready for your accountant at the end of the year – no last-minute panic! But, more than that, bookkeepers get to know you and your business and work with you to ensure you are making the most of your finances – are you claiming the right business expenses? If you don’t know, they surely will.
What is the role of an accountant?
Your accountant takes records from your bookkeeper at certain times of the year and uses them to complete formalities such as your year-end accounts, VAT returns and company tax returns. They’ll also interpret data to produce financial reports, cashflow forecasts and budgets and can use their expertise to improve the financial health of your business and work with you to increase your profitability.
Do I really need both?
‘Do I really need a bookkeeper?’ is probably a more relevant question. Most small businesses will happily hand their accounts to an accountant at the end of the year but many do their own bookkeeping. And maybe for good reason, why spend money when you don’t have to? However, consider how much time you spend managing your finances and therefore how much you would save is someone else managed them all for you.
Furthermore, accountants are more expensive than bookkeepers. The less time accountants have to spend on your accounts the better, and one way to ensure they spend as little as possible is to hire a bookkeeper; know more about how a bookkeeper could help you, speak to Rebus Bookkeeping today.