Do I Need An Accountant or Bookkeeper?
Successful businesses are anchored on healthy business finances. You need to have healthy finances and cash flow. And to manage these aspects of your business you need expert accountants and bookkeepers.
But most business owners don’t know whether they need an accountant or bookkeeper. These two types of professionals have different responsibilities in the business world, each with a unique skill set.
So which one do you need? This post will get into the details about an accountant and bookkeepers, including what they do and what qualities they need. It’ll also highlight the differences between these professionals to help you decide who you need for your business.
What Does An Accountant Do?
Accounting entails keeping track of money and other assets. This process involves creating and maintaining financial records and identifying, measuring, and analysing information that helps managers make business decisions.
Accountants are responsible for ensuring that companies follow all applicable laws. They review financial statements to represent a company’s finances accurately. They also advise on how to organise and manage a business’s finances.
The main responsibilities of an accountant include:
- Making sure all transactions are recorded promptly and in accordance with GAAP (generally accepted accounting principles).
- Preparing financial statements, including income, cash flow, and balance sheets.
- Auditing financial statements prepared by other accountants or companies, checking for accuracy and completeness of figures and disclosures.
What Qualifies Someone As An Accountant?
The Institute of Chartered Accountants in England and Wales (ICAEW) defines an accountant as “a professional who has the education, knowledge and skills to advise on financial matters, give tax advice and help with the day-to-day management of businesses.”
To become a chartered accountant in the UK, you must complete several exams. The first stage is to pass your ACCA (Association of Chartered Certified Accountants) exams. These tests cover accounting theory as well as practical finance skills.
Once you’ve passed these exams, you’ll be able to apply for membership with a professional body such as ICAEW or CIPFA (Chartered Institute of Public Finance and Accountancy).
What Does A Bookkeeper Do?
Bookkeeping is a crucial aspect of running a business. You need an expert to help you with bookkeeping; otherwise, your business will suffer. A lack of proper bookkeeping will make it hard to keep up with all the numbers.
A bookkeeper’s responsibilities include:
- Keeping track of all expenses and income.
- Reconciling bank accounts and credit card statements.
- Preparing financial reports for owners, investors, and lenders.
- Recording payroll transactions
What Qualifies Someone As A Bookkeeper?
To become a bookkeeper, you must have good math skills, computer literacy, and an interest in business administration. You must also be able to work without supervision, have excellent communication skills, and multitask without being distracted.
Difference Between An Accountant And A Bookkeeper
A bookkeeper keeps the books or accounts of an organisation. They record all financial transactions, such as sales and purchases, payments made, expenses incurred, etc.
On the other hand, accountants provide advice on financial matters, including tax planning and preparation. These professionals study accounting and finance and are usually found in public practice or working for a private company.
The job of the accountant differs from the job of the bookkeeper. An accountant will look at your finances as a whole, ensuring everything is in order before making any recommendations for improvements or changes to your business model.
An accountant does not record individual transactions as a bookkeeper does; they do not need to know how much was spent on office supplies last month or what you paid for lunch on Thursday afternoon.
Are There Different Types Of Accountants?
Accountants are professionals who help businesses and individuals manage their finances and tax affairs.
There are different types of accountants, including chartered certified accountants (CCAs), certified management accountants (CMAs), and chartered financial analysts (CFAs).
Accountants can help with a wide range of tasks, from setting up a business to preparing annual accounts and tax returns and offering specialist advice on areas such as corporate finance. Below are the roles of the different accountants.
· Chartered certified accountants
Chartered certified accountants (CCAs) are recognised as one of the most qualified accountants in the UK. They must complete an approved qualification and training programme before qualifying for a professional examination. CCAs are required to maintain their skills through ongoing professional development throughout their careers.
· Certified management accountants
Certified management accountants (CMAs) are highly skilled financial managers with experience taking responsibility for business performance in different areas of accounting and finance, such as taxation.
CMAs must complete an approved qualification and training programme before sitting for a professional qualifying examination. They’re also required to maintain their skills through ongoing professional development throughout their careers.
· Chartered financial analysts (CFAs)
They’ll deal with investment management and research, often in conjunction with a solicitor or another professional adviser, to ensure that their work complies with the law.
Do You Need Between An Accountant Or A Bookkeeper?
It depends on what you require from your accountant or bookkeeper. If you’re looking for someone to help you keep track of how much money is coming in and going out, then a bookkeeper is the right person for the job.
Your bookkeeper will be responsible for recording transactions, balancing your books at the end of each day or week, and sending invoices or payments out according to their due dates.
If you want help with payroll, tax filings and other financial services like consulting (for example: Should I start an LLC?), it would be beneficial to hire an accountant instead. An accountant works with businesses on a larger scale than just basic accounting tasks. They can provide advice about business structure and compliance requirements such as those required by government entities, including state tax departments or federal agencies like the IRS (Internal Revenue Service).
By now, you already know if you need an accountant or bookkeeper. But if you’re still not sure, the answer is both.
Why? Because your bookkeeper will record your daily financial transactions and perform basic accounting tasks. On the other hand, an accountant will advise you on your business, helping you make sense of your financial data, and ensure everything is being done correctly from a legal and tax perspective. You don’t want to risk making losses or breaking laws just because you don’t understand what is going on with your finances!