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.
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.