What is the Difference Between Accounting and Bookkeeping?

Deciding between hiring an accountant or bookkeeper? Despite their seemingly similar job titles, accountants and bookkeepers carry out completely different roles.

If you’re deciding between one or the other, it’s important to understand the similarities and differences between each. You should also keep in mind that depending on the company, their responsibilities may differ.

Read on to learn more about the ways an accountant and bookkeeper can help your business grow, making it more profitable and successful in the future.

What are the differences between an accountant and bookkeeper?

Accountants handle the accessing and interpreting of financial data and information. Typically equipped with a higher skill set than a bookkeeper, accountants must hold certification (Chartered Accountant or CPA) or degree, and are often on a higher salary than a bookkeeper.

Bookkeepers usually report to an accountant, and while the job does not require any formal training, it is still very important. Bookkeepers manage the financial data for a business. Based on the information compiled by the bookkeeper, an accountant can provide recommendations regarding a company’s, spending, taxes or other financial concerns.

What are the responsibilities of a bookkeeping service?

Bookkeepers mainly focus on managing cashflow. From tracking daily, weekly, monthly and quarterly financials to discovering the most efficient ways to manage money, a bookkeeping service can help you keep accurate records of all business proceedings.

Daily responsibilities of a bookkeeper include:

  • Implement and manage accounting software, including data entry.
  • Monitor bookkeeping service policies and procedures and train staff on how to use software.
  • Develop accounts and assign expense categories.
  • Enter expenses and income into the software, including non-digital payment methods.
  • Handle all banking activities, including deposits and withdrawals.
  • Maintain records, backup and archive when necessary.
  • Assist the accountant in preparing financial statements.
  • Assist with audits led by the accountant and flag any discrepancies.

What are accountants responsible for?

While a bookkeeper’s sole responsibility is managing expenses for a company, an accountant can offer support in a range of ways. The duties of an accountant typically fall within the following four categories:

1. Managing data

Accountants oversee how data is managed, stored and updated. While bookkeepers can help to recommend software for data entry, accountants hold the ultimate approval.

2. Financial analysis and consulting

Accountants assess a company’s financial standing and provide consulting based on their findings.

3. Financial reporting

While a bookkeeping service can help pull together reports, accountants can analyse the data and make further recommendations.

4. Regulatory compliance

Do you require an internal audit function or are you being audited by the ATO? Accountants can help businesses stay up-to-date on the most recent government regulations and ensure they are compliant with industry standards.

Should your business seek help from a bookkeeper or an accountant?

Whether you need an accountant or bookkeeper will likely depend on the stage your business is in and what you wish to achieve for the future. If the finances for your business are fairly straightforward – hiring a bookkeeping service may meet your needs.

For more complex scenarios, you should engage an accountant. While they can perform all the functions a bookkeeper can, they can also serve as an invaluable source of advice when it comes to managing cashflow, budgeting and strategic planning.

Whether you are looking for an accountant or bookkeeping service, Mizael Partners offers a range of services that can suit the unique needs of your business. Call 0466 228 000 today and we will be happy to answer any questions and assist you in finding a bookkeeper or accountant for your business.

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Are you a business located in Ringwood, Bayswater, or Croydon? Looking for business accounting and tax accounting solutions? We would love to help you grow.

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About Mizael Partners

Mizael Partners is proudly run by founding director, Ryan Mizael. Ryan and his team have been providing innovative accounting, auditing, financial advisory, tax and cloud-based technology solutions since 2002.

Why Us?

  • We have a team of experienced chartered accounting professionals.
  • We specialise in accounting services for top companies.
  • We provide a wide range of services tailored to meet your needs.

Call Ryan Mizael at +61 (0)466 228 000 today for a personalised business accounting experience.