Do I need an Accountant or Bookkeeper?
Posted on 24th September 2020 at 12:15
Over the years, one question has remained consistent when we talk to new clients. 'Do I need an Accountant or Bookkeeper?'
In this blog we will highlight the differences between each and hopefully give you the information to decide what is best for you and your business.
Let me start by saying, not all bookkeepers have to be qualified. If you are good with figures then you could choose to do your own books.
However a qualified bookkeeper will have a deeper understanding of legislations, tax, VAT and employment laws. This inevitably helps people who simply do not have the time to manage their business and keep in line with the stringent and ever changing laws around company finance.
In the past, bookkeepers would not have been qualified and would have worked solely as data entry for day to day business finances, all the information would then be passed on to a qualified accountant who would analyse the figures and give advice to the company based on their findings. It would be the job of the accountant to sign off relevant paperwork and converse with HMRC on the company’s behalf.
Today the role of a bookkeeper has changed, primarily down to the advance in bookkeeping software and due to the fact that Bookkeepers can now be qualified and have therefore studied a broad spectrum of the finance sector.
In this light, the role of an accountant has also altered, which tends to be why the question, ‘Do I need an accountant?’ has frequently been raised.
The job of an accountant hasn’t changed but the requirement of one has.
In fact, it is often overlooked that accountants and bookkeepers work closely together and are not in direct competition with each other. Most accountants will have a bookkeeper working for them or with them. In the same light, bookkeepers will usually have an alliance with an accountant to cover anything outside of their remit. Accountants have studied all areas of finance in depth and can give financial advice relating to business and personal finances, they will have specialist knowledge in areas like VAT for example and if they are a chartered accountant, they will have a governing body overseeing them to ensure they keep up with their training and are conforming to best practice.
However, this level of accountancy is not required for most small – medium sized business’ (with the exception of those that rely heavily on trading outside of the UK) meaning a bookkeeper could easily provide all the services required to ensure the business’ finances were recorded, submitted and kept in order.
Whilst there may be an occasional need for an accountant to look over your accounts, you can save yourself a lot of money by hiring a qualified bookkeeper to manage your day to day finances, complete self-assessments, provide management accounts, set up company formations and run VAT returns.
Please remember, the liability of your company’s finances will always fall to the director, regardless of who you use to look after your accounts. (Unless they are Audited Accounts.) With that in mind, the most important thing to do is find someone who you can trust.
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