Accountant vs. Bookkeeper
We get asked it all the time; what is the difference between a bookkeeper and an accountant and why do I need both?
There is quite a distinction between the two and it's important to acknowledge it's not one vs the other. Bookkeepers and accountants work in synergy for the benefit of you; their mutual client.
Let’s break that down a little further. As your bookkeeper, we are there to handle all of the day-to-day transactions. That may include payroll, invoicing, bank reconciliations, GST returns, processing supplier invoices and reconciling supplier statements, and of course chasing those late payers.
With our finger on the pulse and an eye across the daily transactions of your business, we are there to verify your balance sheet account balances, help create budgets, produce cashflow reports and forecasts and clearly explain to you what all these figures are saying.
Our job is to create order and meaning by organising your company’s financial data to ensure a nice and tidy set of accounts to hand to your accountant at the end of the financial year.
Pro tip: This will save you a substantial bill from the accountant if they have to decipher your financial records due to poor practices.
Bookkeepers have often learned their specialised trade from many years experience, or like us, have undergone higher level education and obtained a Bachelor of Business or similar.
On to your accountant…..
These guys generally take care of anything that is tax related and ensure you meet all of your tax obligations. Their job is to make sure your accounts accurately reflect the position of the business, that you are claiming everything you are legally entitled to and paying the minimum of tax legally required.
They are your go-to with the IRD and work as your representative which is often very helpful. They will explain all the different tax laws and be your advocate if need be.
They are the ones to talk to about business structure and the different tax implications for each, whether you are setting up a company, partnership or are a sole trader.
They can of course prepare cashflow reports and budgets, but if you have a good bookkeeper - they shouldn’t have to.
Accountants would have gone through an accounting degree and have perhaps undergone further studies to become a Chartered Accountant or CPA.
Whether you are a SME or bigger enterprise, YOU NEED to seek specialist advice and help from both a bookkeeper and an accountant. In the beginning, new, small businesses may try to facilitate the bookkeeping themselves. This isn’t a good use of your time. After all, you can’t deliver the best possible service or be out obtaining more clients if you are stuck in the office seeing to the mountain of bookwork.
A good accountant will make you money.
A good bookkeeper will save you money, and give you time.
Both are worth their weight in gold.