Day-to-day bookkeeping is a fundamental and unavoidable aspect of owning your own business.
You can always choose to undertake the burden of day-to-day bookkeeping yourself. However, you’re often better served enlisting a dedicated bookkeeper or accountant to perform bookkeeping tasks on your behalf.
Let’s unpack the key differences between a bookkeeper and an accountant. Then let’s delve into the importance of bookkeeping and accounting to better understand the respective value they bring to a business.
Bookkeeper vs accountant
If you’ve made the wise decision to engage the services of a business advisor to help manage your financial operations and achieve your business goals, you’ll have another decision to make.
The decision: bookkeeper vs accountant?
Which form of advisory services will best suit your needs? Do you require more basic day-to-day bookkeeping assistance or the expanded scope and services of an accountant?
The decision will be tied to your aims, financial position, personal capacity, and type of business. To assist this decision-making process, we first need to unpack the differences between a bookkeeper and an accountant.
What does a bookkeeper do on a daily basis?
A bookkeeper excels at day-to-day maintenance of your small business’s key accounting records. Many smaller and less complex businesses will benefit from the services of a bookkeeper.
Daily tasks of a bookkeeper involve:
- maintenance of ledgers and balance sheets
- reconciliation
- compliance work
- data entry
- recording financial transactions
- organising and posting finances to various accounts
- daily banking
- production of basic reports
- accounting software advice
- payroll
- tax returns
Daily bookkeeping often requires access to your accounting software to perform regular tasks, creating shared visibility of your small business financial position.
What does an accountant do day-to-day?
To understand what an accountant does day-to-day, we need to frame it as an advanced add-on to bookkeeping practices. An accountant can certainly perform all the aforementioned bookkeeping tasks above.
While an accountant can be a bookkeeper, a bookkeeper is not an accountant.
While in no way diminishing the importance and role of a dedicated bookkeeper, the additional services offered by an accountant can be appealing to many businesses.
More advanced and complex businesses looking for growth will be attracted to the services of an accountant. These extended services will naturally come with higher fees.
The extra services of an accountant involve:
- forecasting and future planning
- advanced reporting and analysis
- business model advice
- growth coaching
- advanced debt management
- financing options and guidance
So, while a bookkeeper is data and task oriented, an accountant uses that initial data to create much deeper analyses which assist in decision making.
Importance of bookkeeping and accounting
The importance of bookkeeping and accounting cannot be understated if you wish to run a compliant, profitable, stable, and well-maintained operation.
Leave it to the experts
The finer aspects of financial management and government interaction can be fiddly, tempestuous, and ever changing.
Take the iterative and never-before-seen changes to taxation, grants and compliance responsibilities that were introduced under various COVID-19 mitigation schemes. Keeping abreast of these morphing changes is a job unto itself – a job best left to those who literally do it for a living.
Freedom from daily bookkeeping
Freeing up your time and energy from time consuming and laborious bookkeeping tasks is appealing. By leaving day-to-day bookkeeping and accounting to qualified and dedicated advisors, you can better focus on running your business.
Compliance
Compliance with the ATO and other government departments is a legal necessity and is your responsibility as an Australian small business.
There’s no better way to ensure your business remains compliant than to engage the experts in this field and remove any potential errors or guesswork.
Financial clarity
Being able to trust in the accuracy of your current financial position is not only a goal within itself, but it also leads to consecutive, accurate and trustworthy decision making.
Before you can make changes to the course of your business, or understand where work is required, you need financial clarity which will be laid bare by the work of a good bookkeeper or accountant.
Confident decision making
By having true clarity over the daily or weekly state of your finances and cash flow, you can then confidently make predictions, decide to invest in growth, act to lower debt, work to increase cashflow or patch developing holes in your financial security.
Without real time reliable data, every subsequent action, assumption, or decision is compromised.
It’s prudent to undertake some research into the benefits of accountants and bookkeepers before deciding to go it alone.
While many business owners like yourself choose to undertake day-to day-bookkeeping themselves, sitting down with an advisor to understand what value they can bring to your operations is a wise undertaking.
