Ensuring the ongoing financial sustainability of a business requires a professional. However, while the terms ‘bookkeeper’ and ‘accountant’ are often used interchangeably, they are actually two distinct financial roles.
Both can provide invaluable support in ensuring financial health and compliance for a business but understanding which of the two options is right for you can ensure you make an informed decision for the ongoing success and efficiency of your operations.
Bookkeeper vs Accountant
What is a bookkeeper?
Bookkeepers are responsible for the day-to-day record keeping of financial transactions and accounts for a business.
This can include maintaining accurate ledgers, reconciling bank statements and producing financial reports.
In the modern world, specialised bookkeeping software is utilised to seamlessly organise and track financial data to keep records accurate and up to date.
Daily Bookkeeper Tasks
Recording Transactions
Recording of all daily financial transactions, including sales, purchases, expenses, and payments, into the accounting system.
Bank Reconciliation
Reconciling bank statements with financial records to ensure accuracy and identify any discrepancies.
Invoicing
Creating and sending invoices to clients, ensuring timely billing and tracking of accounts receivable.
Accounts Payable Management
Processing supplier invoices, verifying purchase orders, and managing payments to vendors, ensuring bills are paid on time.
Payroll Processing
Calculating employee wages, handling deductions, and processing payroll, ensuring employees are paid accurately and on time.
Financial Reporting
Generating daily financial reports, such as balance sheets and income statements.
Expense Tracking
Monitoring and categorising daily expenses, maintaining a detailed record of all expenditures made by the business.
Petty Cash Management
Overseeing petty cash funds, ensuring that small, everyday expenses are appropriately documented and accounted for.
Data Entry
Entering data into accounting software, including sales figures, expenses, and other financial information, and maintaining an organised and up-to-date database.
Communication
Communicating with clients, suppliers, and internal stakeholders regarding financial matters, addressing inquiries and providing necessary financial information.
What is an accountant?
Accountants provide a broader range of financial services and can help businesses to understand their wider financial position and health.
Accountants use data to provide insights into a company’s financial standing and use that information to prepare tax returns, provide strategic advice, help with financial planning and ensure ongoing compliance with relevant New Zealand tax laws and regulations.
In general, accountants offer a deeper understanding of relevant financial matters and can provide strategic advice.
Daily Accountant Tasks
Financial Analysis
Analysing financial data, identifying trends, patterns, and anomalies to provide insights into financial performance.
Budgeting and Forecasting
Developing budgets and forecasts based on financial analysis, helping plan for future expenditures and revenue targets.
Tax Planning
Planning to minimise tax liabilities, ensuring compliance with tax laws and regulations while optimizing tax benefits.
Audit Preparation
Preparing the company’s financial records and documentation for audits, ensuring all necessary documents are in order for external auditors.
Financial Advising
Providing strategic financial advice to management, suggesting ways to improve profitability, reduce costs, and increase overall financial efficiency.
Compliance Management
Ensuring legal and regulatory requirements, including tax filings, financial reporting, and other compliance matters.
Financial Reporting and Analysis
Generating detailed financial reports, interpreting the data to provide meaningful insights for decision-making purposes.
Investment Analysis
Evaluating potential investments, analysing their financial viability and aligning them with the company’s financial goals.
Cash Flow Management
Monitoring cash flow, ensuring the business has enough liquidity to cover its obligations, and recommend strategies to maintain a healthy cash flow.
Strategic Planning
Strategic planning and the offering of financial expertise to help shape the company’s long-term goals and initiatives.
How do you know if you need a bookkeeper or an accountant?
Even with an understanding of the roles and responsibilities of bookkeepers and accountants, it can be confusing to know which your business needs.
Work through the following list of questions when considering which type of financial service to procure.
1. How large and complex is your business?
| Your answer | what you need |
|---|---|
| I own a small or medium sized business and our transactions are simple | Bookkeeper |
| I own a large business with complex financial needs | Accountant |
2. What sort of financial services do you need?
| Your answer | what you need |
|---|---|
| Record keeping and day-to-day financial tasks | Bookkeeper |
| Financial analysis, tax planning, and financial strategy advice | Accountant |
3. What sort of taxation and compliance support do you need?
| Your answer | what you need |
|---|---|
| Basic tax preparation and record keeping services to ensure compliance. | Bookkeeper |
| Tax planning, compliance management and intricate tax regulation advice. | Accountant |
4. Do you need financial advice?
| Your answer | what you need |
|---|---|
| No. Just financial data entry, reporting and compilation. | Bookkeeper |
| Yes. I need financial advice, budgeting assistance, forecasting and investment planning. | Accountant |
5. Do you need assistance with financial audit or review?
| Your answer | what you need |
|---|---|
| No | Bookkeeper |
| Yes | Accountant |
6. Are you looking to apply for a business loan or financial facility?
| Your answer | what you need |
|---|---|
| Yes, but I just need accurate financial records. | Bookkeeper |
| Yes. but I need more than just records and am looking for advice and in-depth financial analysis. | Accountant |
7. What kind of help with payroll and/or employee related benefits do you need?
| Your answer | what you need |
|---|---|
| Basic payroll tasks to ensure employees are paid properly and on time. | Bookkeeper |
| Complex payroll needs including tax withholding calculations, benefits administration and compliance services. | Accountant |
8. Do you deal with complex inventory or cost accounting?
| Your answer | what you need |
|---|---|
| No, just basic inventory tracking and transaction recordings. | Bookkeeper |
| Yes, we utilise intricate inventory systems and need insights into inventory optimisation strategies and the like. | Accountant |
9. Are the services you’re after likely to need financial software implementation?
| Your answer | what you need |
|---|---|
| No, it will just require the use of accounting software platforms for daily tasks. | Bookkeeper |
| Yes, it will require the implementation of a bespoke financial software system and associated internal training. | Accountant |
10. Are you planning to expand or restructure the business?
| Your answer | what you need |
|---|---|
| Yes, but I don’t need advice and am just looking for historical financial data and budgeting support. | Bookkeeper |
| Yes, and I need strategic financial planning advice, guidance on mergers, acquisitions and restructuring, and | Accountant |
ScotPac: New Zealand’s leading provider of business finance solutions
Both bookkeepers and accountants play crucial roles in ensuring the financial sustainability of a business. With your financial strategies, records and data in place, you’re ready to speak to our team about exploring the financial facilities and business solutions that will work best to fuel your company’s growth.
As the largest non-bank lender throughout New Zealand and Australia, the specialists at ScotPac know a thing or two about ensuring the ongoing financial health of small and medium sized businesses.
