What Makes an Accountant Different from a Bookkeeper? Here’s Your Best Guide

Most laypeople may find it challenging to understand the fundamental differences between bookkeepers and accountants, and this is entirely understandable if you aren’t in the industry yourself.

But if you have a business or are a self-employed person, you may already have decided that you need the services of either.  In general, the two provide a related line of expertise, but whilst bookkeepers can perform day-to-day functions, accountants can offer a broader spectrum of more specialised services. But what else makes an accountant different from a bookkeeper? Here’s your best guide.

The tasks of a bookkeeper

A bookkeeper can take charge of daily records and functions, namely recording your business’s financial information and data. Your bookkeeper can handle classifying plus recording many crucial data for your business operations. They can also serve to analyse your transactions as a business using a pre-determined format.

The tasks of an accountant

Whilst an accountant can take on the tasks already mentioned; they can do more. First of all, you should know that the accounting process is a process that identifies, measures, and communicates a person’s or a business’s financial information to make specific decisions and judgments based on this information. Your accountant, in other words, can collate the data gathered and recorded by your bookkeeper, and they can make sense of it, so you know where you stand financially and aid you in your future decisions.

The functions of a bookkeeper

Bookkeepers perform several specific functions, namely:

  • The recording of your business transactions daily
  • The daily posting of your debits and credits
  • The processing of your receipts, invoices, payments, ledgers, and so on
  • The processing and management of your payroll
  • The adjustment of various accounts and the creation of account reports
  • The management of your accounts payables and receivables
  • The preparation of your BAS or business activity statement

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The functions of an accountant

The services provided by an accountant are more calculative and analytical, and they can also serve as an advisor. Your accountant’s services can overlap with the other services provided by a bookkeeper. Your accountant, much like the accountants in central London from GSM & Co, can assist you with your general accountancy needs. Still, they can also help you analyse your business’ performance and create a projection of your future financial standing. They can guide you through your various financial endeavours, so your business remains financially healthy.

Outlined below are some of an accountant’s tasks:

  • Tax assessments, advice, and planning
  • The preparation of your business’s financial statements
  • The analysis and review of your expenditures and budget
  • The assessment of compliance and the preparation of your financial reports
  • The resolution of disparities in accounting
  • The analysis and compilation of your financial data for ledger preparation
  • The development and management of a financial database with the use of good software and other technologies
  • The completion of payroll work

Whether you decide you need an accountant or a bookkeeper, what’s important is to choose wisely. Look for one with the right level of experience and someone who already has a good idea of the ins and outs of your industry.

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