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Who Knows the Differences between a Bookkeeper and an Accountant?

Many people, and businesses get confused over what the terms “bookkeeper” and “accountant” mean. They often get confused by the two or believe there is no difference between them.

However, there are a number of differences in the role of each one and confusion as to what they do could cause problems for many businesses, especially if they were to employ the wrong professional for the wrong role, or neglect the importance of one of the tasks:

SEPARATING THE TWO

Whilst bookkeepers tend to be used on a day to day basis, the role of an accountant is much less frequent. A bookkeeper will keep the daily or weekly financial records of a business. S/he will record all incoming monies, outgoing expenses and invoices, and will ensure that the books match the bank accounts.

An accountant then studies those books and provides advice on the best way for the business to proceed financially. The data they assess from the books can be interpreted to consider which way the business should progress in order to maximise their profit levels.

The Role of a Bookkeeper

Many businesses, depending on their size and structure may employ a bookkeeper, either on a full time, part time or “ad-hoc” basis. The bookkeeper will look at all incomings and outgoings and enter them into a ledger, known as a book.

Bookkeepers have a number of legal obligations. They must act honestly and with good faith in order that the books are kept up to date and honestly. Their process is completed when the certified bookkeeper performs a series of final checks known as a “trial balance”. Following the completion of this step of the process, they will hand the books over to the accountant.

Bookkeeping is vital to have a permanent record, kept in a straightforward manner which can then be later examined.

The Role of the Accountant

Once the bookkeeper has finished their stage of the bookkeeping process, the role of the accountant then begins. The main task of the accountant is in the analysis and reporting of the company accounts. They will be able to see from the carefully kept books what is working and failing for the business. Accountants insight can helps the business become more successful

The accountant will also be responsible for submitted the tax return and evaluation the position on tax. This will ensure the business is legally compliant. Accountants will also try to legally minimise tax the business has to pay.

THE PROBLEM

Businesses often think they can do without either an accountant or bookkeeper. However, without the use of a bookkeeper, a bookkeeping organisation, or an accountant, the business would not be able to meet their legal obligations, could be subject to paying too much (or too little) tax and could potentially lose money as cost efficiency is a role undertaken by the accountant.

CLOUD ACCOUNTING NI PROVIDES THE SOLUTION

At Cloud Accounting (NI) we have a unique process to automate the Bookkeeping process in house in a highly cost effective manner. In other words we can act as BOTH your Bookkeeper and your Accountant. Alternatively, we can work alongside your existing Bookkeeper (either in your business or external) using an online accounting system.

Using our unique cloud accounting process, we have ‘real time’ information on hand to help you grow your profits, reduce your tax and save on IT costs. Every month, every three months, or at a frequency that’s suits your needs, we can sit down with you to discuss your business results and put forward target driven recommendations to help improve it further.

For further expert advice, message us.

 

Part Accountant, Part Business Advisor

Part Accountant, Part Business Advisor

Today’s business accountant wears two hats – ‘bean counter’ and ‘business advisor’. The new breed of accountant can deliver good all-round advice on a wide range of business issues Business start-ups without an accountant in the team from the word go are courting disaster. While there may be few beans to count in those early […]

Evolution of the Modern Bookkeeper

Collaboration with BookkeeperBookkeepers and accountants who offer bookkeeping services will need to adapt to change in order for the role to survive

One of the most startling developments in accountancy I have seen over the last 20 years is how the role of bookkeeping has changed. Bookkeeping has moved from a key service offering from accountants to many more clients choosing to ‘do the books’ themselves. This is mainly due to technology and the increase in computer literacy among all generations, clients have become more confident about using accounting software packages themselves.

But is the ease of bookkeeping making the role redundant, and is there a place for it in the modern accounting world?

As with every area of accountancy in the changing, increasingly technological world, the message from responding members was simple: You need to adapt to survive.

So What are the Challenges for bookkeepers?

Cloud accounting packages such as Xero, Kashflow & FreeAgent are being developed that don’t require the user to have a detailed knowledge of debits and credits.

Apart from technology, regulatory simplification has played a part in aiding clients to do their own bookkeeping.

The new cash basis accounting will simplify things further for bookkeepers and clients when it comes in, but some members are still apprehensive of the regulatory change. The cash basis for VAT and SA returns also means some businesses clients no longer need sales nor purchase ledgers, especially as a lot of businesses don’t offer credit anymore, they get payment up front or on delivery by BACs or credit card and have no use for a sales ledger.

 Utilising Bookkeeping Skills

Good bookkeeping is worth its weight in gold. It requires knowledge and skills; good bookkeepers can never just be replaced by a cleverly designed spread sheet

Using methods like cross collaboration in the cloud and providing clients with ‘ownership’ of their accounts in a limited way, provides scope for the bookkeeper to retain the prestige of their skillset.

The members of Cloud Accounting NI have found that giving clients an ‘ownership’ of their accounts through such a system gives clients and accountants a different outlook on bookkeeping.

 Cloud accounting and Cross Collaboration opportunities

There is a place in modern accountancy for bookkeeping, but appear to offer services that perhaps a traditional bookkeeper might not have previously. Bookkeepers have the opportunity to produce monthly management accounts for clients within five to seven days, and provide an ad hoc bookkeeping services for when businesses whose in-house bookkeepers struggle. Cloud helps with this, and bookkeepers can use remote access via Skype in extreme cases to provide client support.

While Cloud Accounting technology may be reducing fees and workload on the number crunching side, it's given many bookkeepers and accountants the opportunity to do more beneficial and enjoyable work and reduce the size of the business to a much more comfortable level.

In short, the successful bookkeeper of the future will be one who has created collaborative alliance with Chartered Accountants to provide a full service to both their clients to the benefit of all parties, simply by logging in and accessing the same information, real time, from any device, anywhere in the world.

If you want to join our alliance, and discover how we have helped bookkeepers increase their charge out rates by, on average, 40% while giving them, on average 33% more time to find additional clients or spend time with their family, then contact Richard Graham at Cloud Accounting NI. The best contact is 07868 663 538.

CLOUD ACCOUNTING LLP

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ONLINE CHARTERED ACCOUNTANTS

BELFAST ADDRESS
Catalyst Inc,
Titanic Quarter
Belfast
BT3 9DT
+44 2895 219365


LONDON ADDRESS
New Broad Street House
35 New Broad Street
London EC2M 1NH
+44 207 971 1002

Name: Cloud Accounting LLP
Email address: richard@cloudaccountingni.com
Phone: +447868663538