Bookkeepers and Accountants: Know the Difference

Do you know the difference between a bookkeeper and an accountant? In our busy daily lives running multiple accountancy and bookkeeping services for Surrey and Hampshire companies, we are well qualified to explain the differences.

Many people think that these two professions are interchangeable, and it's easy to see why. Not only are they similar in many ways, but the titles are sometimes used interchangeably.

So what is the difference between a bookkeeper and accountant? Here is a quick guide to avoid confusion.

The Role of Bookkeepers

Bookkeepers are essentially responsible for recording the daily transactions of a business. This is essential for any strong business because you need to know what is going in and what is going out.

The bookkeeper records financial transactions including all debts and credits. In addition, they are also responsible for producing invoices, completing the payroll and collecting supporting documents.

Confusion sometimes exists between the roles of bookkeeper and accountant because some accounting roles have become absorbed by the bookkeeper. Some bookkeeping software may also come with basic accounting capabilities, but it's important to know that the two roles are different.

Some companies choose to carry out their own bookkeeping, but others prefer to use a specialist. We provide company bookkeeping services for many clients in Surrey and Hampshire, and we would be happy to offer this service to your company as well.

The Role of Accountants

Accounting is more of a subjective process than bookkeeping because it involves using the information compiled by bookkeepers to produce detailed financial models.

An accountant is more concerned with the bigger picture when it comes to a company's finances. This involves getting a better idea about how the company is progressing, which aids with strategic tax planning and financial forecasting.

An accountant will also prepare financial statements, complete tax returns, provide guidance and advice to the business owner about how financial decisions will impact the business, and will overall provide a greater understanding of profitability.

While some companies do their own bookkeeping, most will hire a professional accountant. You can find out more about accountants at the Institute of Chartered Accountants (ICAEW).

Both Are Essential for a Successful Business

The key thing to remember is that both bookkeepers and accountants have very different roles, but that they are both essential for the success of a business.

Overall, the bookkeeper records the daily transactions of the business, while the accountant will analyse the data and turn it into financial information.

Sometimes you may take care of the bookkeeping in your company and hire a specialist to do the accounting. However, we often perform both roles for companies. You may want to manage your finances independently, but many business owners choose to hire us so that they can focus all their efforts on doing what they are good at.

We provide bookkeeping services in Surrey, as well as accounting services, so if you want to outsource accountancy services or bookkeeping services, we'd be happy to help.