Taken from the FSB -newsletter
Do I need a bookkeeper or an accountant?
SMALL businesses often ask: “Do I need a bookkeeper or an accountant.” The answer is normally both, writes Garry Carter, chief executive, The Institute of Certified Bookkeepers.
Bookkeepers and accountants do different things and have different roles to play in assisting business owners to manage their finances properly.
Also, bookkeepers charge less for their time. It therefore makes sense for them to do as much of your work as they can.
Bookkeepers record the financial transactions of a business and present them in a neat and correct format, whether in a book, on a spreadsheet or on software and will normally complete your VAT return.
They will spend more time with your business and really get to know how it runs and what you want them to get out of the figures.
They will also be able to explain the books to you in a language that you can
understand. It could be that they can take over the task of chasing customers for payment. It is always useful to have someone else to call your best client when they are overdue.
Accountants do not normally want to provide a day-to-day bookkeeping service. What they do best is to take the figures from the bookkeeper and then complete the year-end accounts and other formalities. They will advise you on exciting things like succession planning and exit routes.
It has always annoyed me that the first time you meet an accountant they immediately want to know where you want to be in five years time and how you wish to exit the business.
The problem is that they tend to glaze over if you say that you want to pass on the business to your children and you are more concerned about where the business is now. The best advice, as in most other matters, is to make sure that
you use the correct person for the job. Both bookkeeper and accountant should be qualified and be up to date in best practice in their respective professions so that you can rest easy knowing that your business is in safe hands.
Above all, make sure your bookkeeper and accountant talk to each other and get on with each other.
They should be in accord over the best system for your business. There is no place for egos here, this is your business and you are the customer.
Getting it right from the offset will mean you have regular information about your business that you understand and reduced annual fees from your accountant. The question should not be do I need a bookkeeper or an accountant but rather have I got the best bookkeeper and accountant for my business.