Accountants and bookkeepers are both financial experts, helping businesses and individuals to make their money work more efficiently for them and building a strong financial platform for the future.
They are not the same thing however, and a professional bookkeeper has a very different day-to-day role compared to an accountant.
There are certain accountancy firms, such as accountants plus Glasgow that do offer both accounting and bookkeeping services, and there is certainly an overlap between the two roles but it is important to understand the distinction when seeking financial advice.
What is bookkeeping?
Put simply, bookkeeping is an administrative role that involves recording all the transactions made by a business including handling receipts, invoices, sales, and payments. These services may be sought from an outside source, but they may also be handled in house by your accounts team if you have one.
Outsourcing bookkeeping is a great idea when looking to grow your business as it protects you against any silly mistakes in your accounts that could have legal repercussions and frees up time for you to focus on growing your business operations.
Great bookkeeping is also an important part of accountancy, however, as without accurate financial histories it is impossible to make accurate future predictions that can be used to inform your decision making.
What is accountancy?
Accountancy is the process of providing financial and wealth guidance and support. Accountants do often provide bookkeeping services but this is not their main responsibility.
Accountants not only help you to keep your affairs in order but provide invaluable advice and analysis services that help you to identify future growth opportunities.
The benefits of hiring an accountant include gaining a full understanding of the current state of your company and personal finances, as well as providing you with strategy recommendations for the future based on past accounts.
An easy way to look at it is that bookkeepers record transactions whilst accountants interpret and analyse them in the context of a bigger financial picture.
In general, an accountant will have undergone more training than a bookkeeper and will often be required to undergo certain compulsory training or qualifications before applying for respected accountancy firms.
They may also have a specialism in one certain area such as taxation or cash flow projections.
What are some of the key signs that you need an accountant?
If you are unsure if you need the services of either a bookkeeper or an accountant, here are some of the signs that financial advice is required.
- You have complicated tax obligations – Once you have established a workforce and have multiple investments/income streams an accountant is essential to ensure you are meeting all your tax obligations.
- Your time is limited – Accounting, especially if you are learning as you go, can take up a huge amount of time, taking away from the amount of time that you have to spend on the rest of your business.
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