When it comes to handling the finances in your business, there are two disciplines to draw on; bookkeeping and accounting. But what exactly is the difference between bookkeeping services and accounting services?
The key distinction is that a bookkeeper will be responsible for coordinating your financial data so everything is in order. An accountant will be responsible for gleaning insights from that data to give advice to the business.
What are the responsibilities of a bookkeeper?
A bookkeeper will typically be responsible for the day-to-day recording and organising of financial data as well as the more basic aspects of ensuring everything is in check. This may include:
- Reconciling transactions
Quite simply this process ensures your financial records match your bank records. The process records every incoming or outgoing transaction to track who sent or received it and why.
- Payroll
This could involve everything from creating payslips, accounting for leave or other considerations such as a HELP debt or fringe benefits, through to organising pay runs so that employees get paid.
- Invoicing
This involves the creation, distribution and follow up invoices, as well as tracking when they’re paid.
- Expenses and bills
This may involve handling employee expense claims, tracking bill payments and collecting and recording bills.
- Reporting
Bookkeepers may handle basic financial reporting such as the balance sheet, profit and loss statement, cash flow statement, aged receivables and aged payables.
What are the responsibilities of an accountant?
An accountant is usually responsible for tax, compliance and strategy. This may include:
- Tax
This may involve reducing the amount of tax you need to pay, submitting tax returns and handling tax debts.
- Compliance
This may include ensuring record-keeping is up to scratch, setting policy around payroll and financial management, and protecting your business from an audit.
- Reporting
In addition to basic financial reporting, accountants may also conduct other reports to analyse business performance including reporting on profitability, forecasting sales and cash flow, and preparing budgets or conducting end of year reports.
- Strategy
Your accountant may also give you strategic advice on your business, assist with business processes, advise on asset protection and succession planning, make recommendations on how to run your business more efficiently, and help you reduce costs or overheads.
- Training
An accountant can also work with staff to train them on accounting and bookkeeping software and practices.
What else should you consider?
Sometimes the lines can blur between bookkeeping services and accounting services. Experienced and dedicated bookkeepers may end up handling the responsibilities of an accountant or vice versa.
If you have different teams handling your bookkeeping and accounting, it’s important to ensure they communicate closely. They will need to collaborate often including at tax time or at the end of the year. Ensuring this process is streamlined will reduce double handling and ensure you get the best possible outcomes.
The alternative is to have both your bookkeeping and accounting handled by the same firm. That delivers efficiencies and ensures that nothing slips through the cracks.
If you’re interested in finding a Sydney bookkeeper or accountant in Sydney which can deliver results for your business contact us.
At Keeping Company, we’re not just accountants, we’re business people too. With our counsel, your business can reach its full potential.
We have a team of experts; Cloud Accountants, Business Advisors, Finance Specialists working together and ready to help, contact us today.
For all media enquires please contact Tracy Miller, CMO, Keeping Company 0414 898 452.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.