Why do I need both for my business?
The bookkeeper processes the day-to-day work so that the accountant can concentrate on strategic financial operations including tax planning. So, bookkeepers play an important role – without them, accountants cannot do their jobs.
In fact, “poor accounting” is one of the top reason’s businesses fail. Without bookkeeping or accounting, you are blindly driving your business.
What does a bookkeeper do?
A bookkeeper or BAS Agent (a registered bookkeeper with the Tax Practitioners Board*) is most often your first call when you start your business or outgrow the duties yourself when your business develops.
A bookkeeper can help you choose/swap accounting software to best suit your requirements, ensuring any third party addons (industry specific software) are compatible. There are many digital solutions that your bookkeeper can recommend depending on the number of users/the number of data files/if you track inventory/if you have employees/and the type of support that you require.
If you want to avoid running out of money suddenly, you need to keep an eye on your cash flow. It helps to have a bookkeeper checking the numbers, making sure your cash keeps flowing.
Bookkeepers will set up the accounting software with the correct accounts, bank accounts and coding for GST purposes.
They will process your payroll and make sure the business is Single Touch Payroll compliant according to the Australian Taxation Offices requirements. Bookkeepers will also provide superannuation reports so you can meet your payment obligations in a timely fashion.
Having regular communication with your bookkeeper will keep the file up to date, daily if required.
Bookkeepers produce financial reports and customised reports to assist in business making decisions e.g., Profit and Loss.
Check accuracy and validity of the information by reconciling the accounts and reporting any anomalies to both you and the accountant is a role of the bookkeeper.
Many bookkeepers now also offer training for clients in their accounting software.
Bookkeepers that include business development, may provide the implementation of document management and inventory control processes to create efficiencies within the business. They can create, implement, maintain, and review internal business activities.
Bookkeepers can offer the implementation of POS (point of sale) systems that capture the daily transactions in a retail environment and inventory control.
Bookkeeping involves recording the minute detail in the account’s software. Processing these numbers can at times make it hard to see the overall blueprint. So, it is often better to have someone look at the big picture.
A Bookkeeper works closely with your accountant.
” Nearly all SMEs (96 per cent) have used a professional services firm at some time in their business journey.” https://business.nab.com.au/wp-content/uploads/2018/02/J002905-Professional-Services-Insights-Report_v5.pdf
What does an accountant do?
An accountant can register your entity (type of business) with the Australian Taxation Office, with advice on a legal entity structure that best suits your business.
Accountants report to the business owner and/or other stakeholders. The accountant will report on the state of the accounts providing a clear financial overview.
Providing strategic financial recommendations regarding expansion and investments is the role of an accountant.
An accountant is required to provide annual tax planning and prepare tax returns with reference to current legislation.
The preparation and lodgement of statutory returns and auditing financial information is managed by an accountant.
Giving general business and financial advice by presenting reports, budgets, commentaries and financial statements is usually overseen by an accountant.
The accountant uses the information prepared by the bookkeeper to write the company reports. These reports will include information about income and expenses, net profit, assets, liabilities, and tax. The accountant will also file the company tax return forms and arrange for tax payments to be made.
Having an accountant manage your monthly business reconciliation and reporting may be important for you, including analysing accounts and business plans.
Accountants deal with insolvency cases when required.
Negotiating business deals with clients and associated organisations through your accountant is good business practice.
Whether you interact with your accountant regularly, or only once a year during tax time, your accountant is working behind the scenes all year round.
As the financial backbone of a business, they help people to conceive goals, plan how to achieve them and then take the necessary steps.
An accountant works closely with your bookkeeper.
“A well-run business is likely to make use of both accountants and bookkeepers. The division of labour is important.” https://www.xero.com/us/resources/small-business-guides/bookkeeping/run-your-business/
Why do I need both?
You may want to work closely with your bookkeeper/accountant to better understand their roles and
ultimately be confident in your business financials.
The accountant may look at the figures in the accounts regarding the Reconciliation however the bookkeeper
will explain any numbers and decisions that are not clear.
Financial management is vital in the success of any business. This is true whether you do the work yourself
or hire professionals to do it for you.
Without proper bookkeeping, your accounts will not be accurate. That means your accountant will not get a
clear picture of your company’s finances and you cannot make strategic business decisions.
Just as importantly, your business has a legal obligation to accurately record its accounts and file company
reports to the tax office. So, it pays to get this right.
Bookkeeping will help you do much of this – and will also provide you with useful insights into the financial health of your business.
It is the bookkeeper’s job to ensure that the accounts are valid and up to date when the accountant needs
them. This allows the accountant to use their skills and knowledge to make business recommendations,
report to a board – if relevant – and complete company tax returns.
Implementing accounting automation allows streamlined workflows for more efficiency. These emerging
technologies benefit the business, accountant, and bookkeeper alike.
Among the most important trends in the accounting field are the increasingly high standards surrounding
transparency and a greater focus on data security. These conditions and codes of practice within the
profession create another level of trust and protection.
There are many applications of data analytics in the world of accounting. For example, auditors are using
analytics to enable processes like continuous monitoring and auditing. Similarly, accountants and
bookkeepers who take an advisory role within the businesses can use data matching to identify patterns in
the behaviour of consumers and markets, which can lead to investment opportunities and higher profits.
The analytical mindset of your accountant and bookkeeper ensures your business stays in touch with
trends in your industry promoting your business excellence.
Making sure the daily financial transactions of the business are recorded correctly and providing relevant reports falls to the bookkeeper, whereas accountants use the information to provide tax planning and prepare tax returns.
Few small businesses can afford to hire their own accountant/bookkeeper, so most work on a part-time basis for their clients. Accounting software allows your bookkeeper and accountant to work on the same set of data. They both work simultaneously to give you the best outcome and promote your business growth.