Do you need a Bookkeeper or an accountant?

While bookkeepers and accountants specialise in financial management, the types of assistance they offer and how they can help your business are markedly different. To help you work out which is better suited to your operation - or when a tech solution could do the job - we've put together this handy comparison guide.

What does a bookkeeper do?

A bookkeeper can help you with the day-to-day financial management of your business. Their role typically involves:

• Issuing invoices and recording expenses 
• Entering data into your accounting system 
• Looking after payroll (if you employ staff) 
• Reconciling bank transactions in your accounting system 
• Preparing your Business Activity Statement (BAS) if they're also a registered BAS agent 
• Generating financial reports such as profit and loss, balance sheet, budgets and cash flow forecasts
• A bookkeeper can also work with you to set up processes and procedures to capture financial data relating to your business.

What does an accountant do?

If you're on top of your day-to-day financial admin, perhaps you need an accountant. Accountants are tertiary qualified and can help you with all your tax obligations and financial compliance, minimise your tax contributions, advise on business structures and prepare financial statements. Some accountants can also support you with strategic planning, cash flow management, debt management and business growth. In some cases, they can do some of the duties of a bookkeeper, such as setting up your accounting software, doing bank reconciliations and preparing your BAS. While this crossover can be confusing, remember that accountants are expected to go beyond daily operations.

When will a tech solution do?

Fortunately, a wide variety of software and applications is designed specifically for entrepreneurs planning to manage their own finances. Whether it's receipt scanning, tracking expenses, issuing invoices or chasing payments, these nifty tools do all of this and more in a fraction of the time it takes a person. Some can even pull-out insights, such as profit and loss statements, to give you a clearer picture of your financial position without the need to consult a professional.

In some cases, this might be all you need. For example, when I started as a sole trader, I hired a bookkeeper to set me up with the accounting software. With the right technology in place, I now manage my own business finances in less than an hour each week.

The Australian government is resolving to provide more tech-savvy solutions too. Earlier this year it introduced Single Touch Payroll (STP), which will streamline payroll reporting to the Australian Taxation Office (ATO). Now, small business owners can lodge payments such as salaries and wages, pay as you go (PAYG) withholding and super directly through their accounting software.

Whether you need a bookkeeper, an accountant or simply a new piece of tech will depend on the nature of your business. If your business financials are fairly straightforward, you might find a tech solution sufficient. However, if you find your enterprise is too complex to self-manage, hiring a professional is your best bet.

*The purpose of this article is to provide general information only. For specific financial advice, always speak with your financial institution and seek professional advice.

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