Accountant vs Bookkeeper: What does my business need?
As a business owner starting an enterprise, you tend to manage all aspects of your new venture, including the finances. But as the company grows, you find yourself in need of assistance with various accounting tasks. Employing the services of a financial professional for your company is vital; however, do you need an accountant or a bookkeeper and what’s the difference?
Bookkeeper vs. Accountant: What’s the difference?
The terms “bookkeeper” and “accountant” are often used interchangeably, and their roles do overlap, but there are some distinct differences. Both types of professionals support your business.
Accountants focus on the big picture, interpret financial data and provide expert advice when making financial decisions for your business. Whereas bookkeepers help record business transactions, track their daily finances, and generate financial statements.
Bookkeepers have an administrative, detail-oriented role, and the emphasis is on compiling accurate financial information.
In simple terms, bookkeeper’s keep a record of all financial transactions, logging daily transactions in a logical, accurate, and easily accessible way. Bookkeeping in a small business generally means being involved in a business’s daily operations, tracking financial activity and generating statements.
Typical bookkeeping tasks include:
- Recording financial transactions
- Posting debits and credits
- Producing invoices
- Reconciling bank accounts
- Managing bank feeds
- Managing payroll
- Maintaining and balancing general ledgers
At Exceed, we make use of bookkeeping software to ensure efficient and accurate record keeping. View our service options here.
Accountants use the same information as bookkeepers, but their main focus is to interpret and analyse the financial data. Accountants consider the firm’s big picture, provide financial advice and tax guidance.
They offer a complete overview of where your finances stand, advice on what to do about potential problems and how to prepare for the future. An accountant uses and analyses the financial data recorded by the bookkeeper and provides business owners with essential insights and financial advice based on that information.
Typical accountancy tasks:
- Checking and adjusting financial records
- Interpreting data compiled during bookkeeping processes
- Compiling reports, performing audits, and preparing financial reporting records, income statements, and balance sheets
- Presenting information required for forecasts, showing business trends and highlighting opportunities for growth
- Advising the business owner regarding financial decisions and their potential impact on the business
- Tax submissions, tax consulting and reducing owners’ tax liability, representing the business before SARS if the company is audited
Accountants also play a vital role in helping new entrepreneurs write a business plan. When launching a new business venture, they advise on choosing the company’s legal structure and the tax implications thereof.
When to hire a financial professional.
The duties of bookkeepers and accountants differ, and the right choice depends on your unique needs, your business’s current financial position, and your plans to grow.
Getting expert guidance and support from a professional accountant or bookkeeper can help to protect and grow your business. When you find yourself spending more time on accounting tasks than on the business, it’s time to get help.
Hiring a professional can help lighten your workload and increase your capacity to deal with other areas of the business.
When to consider a bookkeeper.
Hire a bookkeeper:
- for help on a day-to-day basis
- if requiring assistance with payroll, invoicing, receipts, bills etc.
- when a consistent reconciliation of business transactions is needed
- to keep accurate, organised and up to date financial records
When to consider an accountant.
Hire an accountant when:
- applying for a small-business loan
- making important financial decisions and requiring long-term guidance
- needing a high level of expertise and up-to-date knowledge of tax laws
- launching a new business and need advice on the legal structure
How can we help?
Contact us to find out how we can partner with you to take your business to the next level.