Has your accountant ever suggested hiring a bookkeeper to help you manage your business? This shouldn’t catch you off guard. Most people assume that accountants and bookkeepers handle the same job. Of course, they each deal with financial information but their approach differs, and both can offer valuable insights from different viewpoints.
Accountants are able to analyse your financial data and give a financial forecast. Key services offered by accountants include issuing your business with profit and loss statements, filing tax returns and providing other key financial statements. Accountants expertise also extends to providing advice on the viability of sourcing credit from financial bodies to expand a business or launch a new product into the market.
Bookkeepers, on the other hand, are involved in the day to day tasks of overseeing the accuracy of data entry in the company’s payroll, sending out invoices and paying bills on time. They also make sure that company expenses are tracked and reconciled appropriately, and that reporting protocol is being followed.
With technological advancements within the industry, automated solutions such as artificial intelligence now play an increasingly key role in the dynamics of financial institutions and professions such as accounting, banking, and bookkeeping where what was once a clearly defined role is now assumed to be one and the same.
It is important to understand the different services provided by accountants and bookkeepers. Your business needs the services of both an accountant and a bookkeeper. Here is why:
1. Accuracy of financial data
Business is a fast-paced game. Every day, you, as a business owner are required to make decisions, and often, quickly. The ability to make informed decisions, which will lead to desired outcomes is dependent upon the availability of accurate and up-to-date financial information. Regardless of whether the decision involves moving into a new office space or hiring a new Human Resource Manager, having your updated financial information is vital. Entering your business transactions daily can influence decisions which will help your business thrive or falter.
2. Regulatory Compliance
The legalities of business ownership include a strict set of regulations on a variety of matters. The Australian Taxation Office, in particular, is a regulatory body with whom compliance must adhere. It’s crucial that your business is able to account for the relevant wage obligations with use of automated systems such as Superstream and Single Touch Payroll. This needs to be made after every pay and not quarterly or monthly. Inaccuracies can easily land you in hot water with the Australian Taxation Office.
3. Reduced cost of financial responsibilities
Choosing to do-it-yourself when it comes to your financial data may look like cutting costs, but in a real sense, it only makes the situation worse. Getting a professional bookkeeper will help save you money on penalties for wrong tax filings and time that you could use to concentrate on working to grow your business.
Paying bills on time helps you avoid interest and late fee payments which help your business save money. Having your financial records in order can also help you get credit from banks and other lending organizations. Presenting accurate and up-to-date information to accountants allows them to spend more time in analysing your finances and recommending better insights that can help the growth of your business.
4. Receipts and payments management
As a business grows, and so does the amount of paperwork that needs filing. There is no better feeling for a business owner than knowing that receipts and payments are updated and accurate. As a business, you shouldn’t be updating your financial records at the last minute for tax or BAS. Having a bookkeeper ensures that your business is able to file all the liabilities and put reminders or automatic alerts on when the next payments are due, or receivables expected. This way, you are guaranteed your business will not fall behind on financial record keeping.
5. Day-to-day knowledge of financial information
It’s given that in any organisation, a bookkeeper is quite up-to-date with financial records. They are the go-to people if you need to know why a payment is late or why your monthly books don’t balance. As a business owner, you must delegate and acknowledge your shortcomings. If you are not attuned to accounting jargon, a bookkeeper can give good insights when an accountant raises questions about your revenue collection or gross profit margin.
Anthony McPhee, Principal
B.Bus (Accy) QUT | FCPA, SSA (SMSF Specialist Advisor with the SMSF Association) & Registered Tax Agent
Anthony has over 25 years accountancy, taxation and superannuation (SMSF) experience. He eagerly welcomes a challenge and his passion is in small business accounting, superannuation, consulting and taxation advice. He provides real business benefits for each of his clients and is well regarded for his succinct and accurate accounting skills. Anthony is also a self-managed superannuation fund (SMSF) specialist with Australia’s leading SMSF body, The SMSF Association.