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What is the difference between a Bookkeeper and an Accountant?

There is often a misconception that bookkeeping and accounting are the same thing. While they both work to assist you with your finances, there are some important distinctions between the tasks of a bookkeeper and an accountant. It is important to understand that both bookkeepers and accountants are integral parts of your business. While their tasks can sometimes overlap, there are definitely certain aspects of your business that you would specifically entrust to an accountant, and others that you would give to your bookkeeper.

Bookkeeping and accounting may appear to be the same profession to an untrained eye.

Good bookkeeping is the foundation for successful accounting.

Bookkeepers manage the daily processing of financial records of a business.

Accountants have more advisory positions responsible for interpreting, classifying, auditing, analysing, managing reports and summarising the financial data offering advice to business owners.

Keeping on top of your daily bookkeeping requirements can be a very time consuming task and can take you away from what you do best – let the professionals handle the books for you, bookkeeping is on our top five things to outsource to The Virtual Assistants.

Some tasks that are regularly undertaken by bookkeepers:

  • Managing your accounts receivable and accounts payable

  • Following up on overdue invoices with clients

  • Processing invoices, receipts, payments, and other financial transactions

  • Processing and maintaining your payroll system

  • Preparing initial financial statements

  • Reconciling accounts and preparing reconciliation reports

  • Paying GST & Provisional tax payments to the IRD

While an accountant will also be qualified to assist you in these areas, it is important to be aware that there is likely to be a substantial difference in fees charged by bookkeepers and accountants. Keeping this in mind we would suggest considering which tasks are to be delegated to a bookkeeper or an accountant.

Services offered by an accountant can include:

  • Taxation advice and planning

  • Business establishment assistance

  • Auditing

  • Corporate reporting and compliance

  • Superannuation fund advice

  • Financial management advice

This is not an exhaustive list of an accountant’s services, however the tasks outlined here highlight the analytical and advisory nature of their position.

In conclusion engaging both a bookkeeper and accountant to process your business financials is a smart business move and will save you time and money in the long run.

We hope you have found this information helpful.

#accounting #bookkeeping #xero #virtualassistants #newzealand #admin

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