Do I need a bookkeeper or an accountant?
The Institute of Certified Bookkeepers chief executive, Garry Carter, has written a series of articles about bookkeepers for inclusion in a magazine produced by the Federation of Small Businesses (FSB). The articles are intended to give an unbiased view to readers of the role of a bookkeeper. The following is one of the articles in the series.
Small businesses often ask, “Do I need a bookkeeper or an accountant”. The answer is normally “both”. Bookkeepers and accountants usually do different things and have very different roles to play in assisting business owners to manage their finances properly.
Bookkeepers charge far less for their time. It therefore makes sense for them to do as much of your work as they can – bookkeepers record the financial transactions of a business and present them in a neat and correct format, whether in a book, on a spreadsheet or on software and will normally complete your VAT return. They will spend more time with your business and really get to know how it runs and what you want them to get out of the figures. They will also be able to explain the figures to you without all the accounting jargon.
It could be that they can take over the task of chasing customers for payment. It is always useful to have someone else to call your best client when their invoice is overdue!
Accountants do not normally want to provide a day-to-day bookkeeping service. What they do best is to take the figures from the bookkeeper and then complete the year-end accounts and other formalities. They will advise you on exciting things like ‘succession planning’ and ‘exit routes’.
Personally it has always annoyed me that the first time you meet an accountant they immediately want to know where you want to be in five years time and how you wish to exit the business. The problem is that they tend to glaze over if you say that you want to pass on the business to your children and you are more concerned about where the business is now.
The best advice, as in most other matters, is to make sure that you use the correct person for the job. Both bookkeeper and accountant should be qualified and be up to date in best practice in their respective professions so that you can rest easy knowing that your business is in safe hands. Above all, make sure your bookkeeper and accountant talk to each other and get on with each other. They should be in accord over the best system for your business. No place for egos here; this is your business and you are the customer.
Getting it right from the offset will mean that you have regular information about your business that you understand from your bookkeeper and reduced annual fees from your accountant. So the question should not be “Do I need a bookkeeper or an accountant?” but rather “Have I got the best bookkeeper and best accountant for my business?”
Published 01/09/09. Reproduced by kind permission of the Institute of Certified Bookkeepers.