By Auto Count Team
Individuals who are not in the finance or accounting industry and the public are usually unable to tell bookkeepers and accountants apart. Both roles might seem alike as they are financial professionals who manage financial reporting and recording as well as advisory on financial stability. However, in practice these are two entirely different roles with different responsibilities and levels of expertise.
Difference in responsibilities
Bookkeepers often manage initial-level tasks which are crucial to maintain an accurate report from the start. These include day-to-day primary financial transactions of a business and monitoring cash flow by identifying, verifying, recording, and categorising primary financial transactions such as sales and purchases, receipts and bills, as well as payments. They are also charged with managing combined reports which are often in ledgers – either single or double entry, maintaining bank statements and ensuring financial records are properly documented and categorised.
Accountants on the other hand, often manage more complex financial tasks based on the collected information, which include analysing data, preparing financial statements in a specific format such as income statements, balance sheets and cash flow statements, along with more complex operations such as taxation, audit, budgeting, and financial forecasting as well as providing consultation to clients. In other words, accountants focus more on analysing financial data, identifying trends, providing financial advice and interpreting information recorded by bookkeepers to formulate the big picture. This enables business operators to make informed decisions and helps organisations to stay updated on their financial status.
Areas of focus
While both roles are moving towards a common goal, albeit with different responsibilities, the field of focus of each varies. Bookkeepers focus on recording and organising financial records in the correct manner while ensuring compliance with relevant accounting requirements or regulations, as the bookkeeping record is essential for providing accurate data to accountants and tax professionals for further processing.
Accountants often adopt a more analytical approach, by using financial data to analyse a company’s financial status, providing consulting or assistance to business owners on available resources for improving financial performance, and providing insights for more informed decision making. Most accountants also handle the tax matters of their clients.
Role in Taxation
Bookkeepers often do not handle tax planning, strategy, or compliance matters, other than collecting relevant documents if required. Accountants are able to provide comprehensive tax planning and compliance services and should stay updated on tax laws and regulations.
Data processing technology
As technology advances, bookkeepers nowadays generally rely on accounting software for data entry and record-keeping to accurately inputting financial transactions into systems. Accountants too use accounting software to process data but typically utilise more of the systems’ functions and may customise them to generate advanced financial reports and conduct in-depth financial analysis. With the advancement of accounting technology, accounting software can process data in a faster, more organised and efficient manner, which enables accountants to save more time and focus more on supporting the client’s business.
To find out more about how technology can help your finance function, explore AutoCount’s various solutions like on-premise and cloud accounting solutions to suit the different needs of accountants and bookkeepers. Check us out now at: https://bit.ly/AutoCountMIA3