The Biggest Differences Between Accountants and Bookkeepers
If you’re on the hunt for someone who can manage your business’ finances but you don’t have a ton of economic know-how, bookkeepers and accountants might seem like the same thing. While they are both trained to understand the cash flow of business and can provide professional financial advice, bookkeeping and accounting can be quite different. Depending on what you’re looking for, here are the biggest differentiating factors between accountants and bookkeepers.
1. Bookkeepers record financial data while accountants analyse them
Both professions handle financial data very differently. Bookkeepers, for example, are in charge of noting and measuring the financial transactions that occur within a business. They keep a comprehensive record of what goes in and out in order to determine whether your business is making a profit and running smoothly.
A company accountant, on the other hand, will summarise, interpret, and analyse this information in order to help business owners make important decisions regarding operations. They can help determine whether you need to scale up or downsize your staff or whether you may have to cut down on certain resources.
2. Bookkeepers are administrative while accountants help with audits and advice
In any regular business, a bookkeeper takes on an administrative role, maintaining payroll systems, processing invoices, and reviewing your accounts systems. A bookkeeper’s role will usually involve:
Processing all financial transactions, including invoices, receipts, and payments
Reconciling your bank accounts
Preparing periodic reconciliation reports
Managing and reporting on your accounts receivable and payable
Accountants will then translate this data in order to:
Advise you on and plan your taxes
Prepare audits and forecast cash flow
Make corporate compliance reports
Help protect your assets
Create budget plans
Prepare financial statements and income tax returns
3. Bookkeepers and accountants require different levels of training
There’s no denying the skill crossovers between bookkeeping and accounting. To become a bookkeeper, you’ll need to take up several basic accounting courses to qualify for the job. They’re also required to have a decent understanding of mathematics and some experience taking on an administrative role.
Becoming an accountant comes with a larger roster of skills and experience. For one, you’ll have to have at least a bachelor’s degree in accounting and meet dozens of requirements by the accounting code of practice. The three professional accounting bodies in Australia are:
The Institute of Public Accountants (IPA)
CPA Australia (CPA)
The Chartered Accountants Australia and New Zealand (CAANZ)
For the CPA and IPA in particular, the minimum qualification is a bachelor’s degree. On some occasions, you will be expected to have pursued further studies in accounting. This ensures that Australian business owners get the best possible financial advice.
Hiring a bookkeeper or accountant to help grow your business isn’t all about taxes and numbers. An excellent working relationship between these two entities and business owners has a lot to do with empowering intelligent accounting strategies and scaling your business confidently. If you’re shopping for a new business accountant in the Gold Coast, you won’t need to look beyond New Wave Accounting and Business Advisory! We’ll gladly help you get a better grasp of your business’ financial position and come up with out of the box strategies that help you achieve your goals.