One of the most common questions we get asked is ‘do I need a bookkeeper or an accountant or both?’
At our accountancy practice in Cornwall, we offer both services, so we wanted to take a closer look at these roles to see how an accountant and/or a bookkeeper could help your business.
What does a bookkeeper do?
Bookkeeping is essentially the first part of the accounting process, so the work of a bookkeeper and accountant often overlaps.
Bookkeeping is predominately about supporting the business on a regular basis by sending out invoices, reconciling bank accounts and helping to pull together and organise the wide variety of paperwork that is generated, from receipts to expense claims.
One of their most important tasks is to ensure the businesses financial software, such as Quickbooks or Xero, is used and managed correctly.
In some cases, more experienced bookkeepers can even help with payroll, and the filing of VAT and self-assessment returns.
What does an accountant do?
Although an accountant is familiar with all the areas covered by a bookkeeper, their job is to take a ‘higher level’ view of your business.
In practical terms this means business strategy and financial planning, as well as cash flow management, forecasting and navigating tax liabilities, all in addition to preparing your annual accounts.
The extensive experience and qualifications accountants have mean they are a great asset to a growing business, helping to create practical steps that will drive the business forward financially, as well as offering advice and making introductions to other key contacts.
Are accountants and bookkeepers qualified to look after my business.
Unless chartered or qualified with another professional body, anyone can call themselves an accountant, even if they have no professional training or qualifications to back it up. So where does that leave you if your accountant makes repeated mistakes, has provided you with dodgy advice, or has even broken the law?
If you’re using an unregulated accountant you’re at greater risk of missed deadlines, indiscrete practice and mistakes on reporting – all of which can result in extra hassle for you and unnecessary mounting fines. Equally, it can lead to your company building a poor reputation, which can be just as damaging to your business in the long run.
Make sure you use someone in your business who is qualified for what they are doing, or you risk paying for bad advice and could find you and your business in a financial mess.
A Chartered (ACA) or Certified (ACCA) Accountant has to undertake years of training to get their qualification and must maintain rigorous annual professional development to stay up to date. They are also bound by a code of ethics and professional standards, and will have professional indemnity insurance as well as having to undergo monitoring of compliance and quality.
Make sure you look for the relevant professional letters after someone’s name or ask them what qualifications they have to cover yourself and your business.
Bookkeeping qualifications are more accessible and the most popular are AAT (Association of Accounting Technicians) and IAB (International Association of Bookkeepers). Again make sure your bookkeeper has some level of qualification so that you can be sure you are in good hands.
Should I have an accountant or a bookkeeper?
In general terms, the answer to this question comes down to what type of business you have, and what plans you have for future growth.
If your business is pretty well established and straightforward then a bookkeeper or a non-qualified accountant will help you keep on top of your admin and paperwork and keep your business running smoothly.
They will be able to help by recommending ways to ensure your process are robust and efficient and operating in the best way. Their experience will mean you and your team don’t waste valuable time on the business financial administration while you could be generating revenue.
Bookkeepers usually charge an hourly rate, and will work with you to decide how often they should work on your books, depending on your individual requirements and the size of your business.
How could an accountant help my business?
Chartered accountants have spent many years training for their qualification and can give expert advice on tax matters and trading legally as well as helping your business to remain successful and solvent.
If you are new to business, getting the advice of an accountant at the start will enable you to get valuable advice on getting started, raising finance and minimising taxes that may come too late if you wait.
If you have been in business a while, an accountant will be able to help you put processes and strategies in place that can help you grow and expand your business in a controlled way that can prevent cashflow issues further down the line.
To qualify as chartered, your accountant will have had to carry out work for a breadth of different clients across a range of industries. Building acute business awareness and strong personal judgement, they’ll most probably have gained experience working with businesses that are high-performing to those under financial pressures.
Our team of bookkeepers and accountants in Hayle, Cornwall, work with a wide variety of businesses across the county, in many cases providing both services for our clients.
We are specialists in a wide variety of areas, including skilled Quickbooks bookkeepers and experienced Xero accountants who support those in the construction, retail and manufacturing industries, and beyond.
Having a local bookkeeper and accountant as part of the same firm is incredibly helpful when it comes to smooth and effective communication, both between these individuals and when it comes to working alongside your business.
If you’re keen to find out more about the options available to your business, in addition to honest, friendly advice about the best approach to suit your requirements, why not get in touch with the Bickerstaff team?