What’s the difference between an accountant and a bookkeeper?
It’s funny, you would never dream of asking your partner to do your dental work or fix your electrics if they hadn’t been trained first so why would you ask someone who hasn’t been trained to do your books? At Rosemary Bookkeeping, we are surprised how often people do. But we’re never surprised that people get themselves in a pickle, especially with VAT.
This is the first in a series of articles for business owners explaining why good bookkeeping is important to your business and what you should expect from your bookkeeper. Today we are going to focus on the difference between bookkeepers and accountants. There’s a common misconception that accountants audit a company’s accounts at the end of the year – well it’s true that accountants do audit accounts but you have to have a turnover of over £6.5m and assets worth more than £3.26m so for the majority of business owners this will never become necessary
Don’t get me wrong, I’m a real fan of accountants – they do a fantastic job when you need help with strategy, tax planning and doing the year end compliance work – sending accounts to Companies House and HMRC. But all accountants will admit that they are under severe time pressures to do your work at the end of the year so they just don’t have the time to go through your paperwork in fine detail. Of course accountants can review the books, but with every best will they will be more expensive than a bookkeeper.
So what should you look for in a bookkeeper? Well you need to find someone who has clients already, is accustomed to dealing with VAT and hasn’t reached capacity. Some bookkeepers will charge by the hour but watch out for this – someone who isn’t charging a sensible amount will take longer to do the job, you’ll be paying for them to make mistakes and correct them and won’t necessarily have the skills to do a proper job. It can end up being a false economy – much better to pay more for each hour but even better to find someone whose charges are proportional to the work they do.
Look for a bookkeeper who doesn’t give you tax advice or offers to prepare your cash flow– however well meaning, many bookkeepers just don’t have the skills for this. They are great at VAT, helping you understand which parts of your business are the most profitable, helping you understand who you owe money to and who owes you money. Next time I’ll be explaining what you should expect your bookkeeper to provide – if your accountant isn’t examining your books, make sure you are getting the best from your bookkeeper.
Rosemary Bookkeeping franchising have written, an exclusive series of articles on bookkeeping for Franchise UK. For more information on Rosemary Bookkeeping click here