How to decide between hiring a bookkeeper or an accountant

Does your small business need a bookkeeper, an accountant or both? Here’s everything you need to know to decide.

If you’re spending more time on your finances than doing your business, it’s time to get help.

Bookkeepers and accountants are key advisors that act as a great support for businesses of any size. But do you need a bookkeeper, an accountant, or both? And what does each do?

Do you need a bookkeeper or an accountant?

Bookkeepers and accountants do slightly different jobs.

Bookkeepers keep track of day-to-day finances while accountants may check in monthly or quarterly. But both are essential for keeping your business up to date with compliance and running smoothly.

While an experienced bookkeeper can be very knowledgeable about business processes, an accountant has university-level training in tax, business strategy and setting up structures such as family trusts.

Small businesses don’t always need a bookkeeper on staff; there are professional bookkeepers who offer their services charged either hourly or at a monthly fixed rate. Your accountant may also offer bookkeeping as part of their service.

But whatever the setup, you’ll want your bookkeeper and accountant to be able to work together when needed.

And it’s important to remember that while your bookkeeper and accountant deal with your business finances, a person should not give you investment advice unless they hold an Australian Financial Services license, or are the registered agent of a license holder. The ASIC Connect Professional Registers will tell you if the company or person holds an AFS license.

What skills do bookkeepers and accountants have in common?

Both your bookkeeper and accountant should be interested in making your accounting processes as easy as possible.

They should also be on top of changes to superannuation and any targeted government supports that could assist your business.

And it’s vital that your bookkeeper or accountant is easy to talk to, and available to work through any concerns you may have.

What does a bookkeeper do?

Bookkeepers deal with the day-to-day finances of your business and keep a finger on the pulse of your business’s cash flow.

They will keep track of your business’s income and bills, chase overdue payments and organise Single Touch Payroll and superannuation payments. And they will get all those numbers into the right spots in your accounting software.

A bookkeeper who is a registered BAS agent can also prepare and lodge your Business Activity Statements.

A good bookkeeper can suggest appropriate technology and digital solutions for your business processes.

This is especially important as the Australian Taxation Office (ATO) continues to evolve its compliance regime with the expansion of Taxable Payment Reporting Systems (TPRS) for payments to contractors and subcontractors, the introduction of Single Touch Payroll and the switch in 2020 from AUSkey to the myGovID system.

Your bookkeeper should also be across tech innovations that make your workday simpler, whether it’s an app for timesheets and rostering, or automating invoices.

To ensure a bookkeeper is up to the tasks you need, look for a member of the Australian Bookkeepers Association or the Institute of Certified Bookkeepers.

READ: 5 tips for choosing the right bookkeeper

What does an accountant do?

An accountant’s tasks can overlap with a bookkeeper’s, in that they can help set up accounting software, do the payroll and your BAS.

But an accountant can also advise on setting up the legal structure of your business, for example, as a company, corporation, partnership or sole trader, and help you in applying for an ABN or ACN.

An accountant who is a registered tax agent can provide you with up-to-date advice on tax planning. They can prepare and lodge your tax returns and other financial statements, and deal with the Australian Taxation Office on your behalf.

Importantly, a qualified accountant is trained to analyse your business’s data and can offer advice to help set up your enterprise for ongoing success. They can work out a strategic business plan, assist in setting budgets, and even point you to financing options, if needed.

If you want to retire, sell your business or buy another, an accountant can connect you with professionals experienced in business valuation or succession planning.

And if you plan to establish a Self-Managed Super Fund (SMSF), an accountant can help set up your fund’s financial systems and, once it’s operating, prepare your fund’s accounts and statements.

To check that an accountant is properly qualified and registered, look for a member of one of these organisations: the Institute of Public Accountants, Chartered Accountants Australia and New Zealand or CPA Australia. The government’s MoneySmart website also has a list of useful questions to ask when choosing an accountant.

Need help choosing the right advisor for your business? MYOB has a comprehensive directory that’s FREE to use that will help you find the right bookkeeper or accountant for your needs — you can even filter by location to find the one closest to you. Start here.