What is The Difference Between a Bookkeeper and an Accountant
A bookkeeper and an accountant belong to the same field. However, their jobs differ in many ways. Everyone knows that a bookkeeper is responsible for keeping records of day-to-day transactions, and an accountant is responsible for filing taxes, giving financial advice and helping with budgeting and cash flow.
What many do not know is that there is not much overlap between these two, and there are many things an accountant can do that a bookkeeper cannot. Therefore, we are sharing here the three ways in which bookkeepers are different from accountants.
Bookkeeping is Performed Daily
Bookkeeping is done daily and requires day-to-day transactions. Accounting needs a wider view and includes budgeting, cash flow forecasting, and much more. If you think of maintaining and paying attention to your inventory, an accountant would be your best bet. If you want to find your spending or revenue trends based on daily transactions, even then, an accountant would be the person to go to.
Bookkeeping Is Only Involved In Financial Analysis
Bookkeeping is limited to the daily affairs of a business. It does not have any relation with non-financial aspects that affect the business, such as employee performance, inventory analysis, customer survey, marketing tools and their performance, etc. However, they do offer assistance during any financial analysis and forecasting, such as budgeting, cash flow analysis, accounts receivable, etc.
Bookkeeping Is Crucial Yet Not Sufficient On Its Own
If a small business is applying for a loan, it may need to show its daily transactions as part of the process. However, that will not be limited to bookkeeping itself. A bank or money lender usually requires balance sheets, your profit and loss statement, your cash flow statement, and your overall turnover for the previous year and the last few years before that.
Even when you are performing a SWOT analysis, the daily transactional history would not necessarily be the most important resource. There would be many others, such as competitor analysis, potential opportunities and threats, etc. When you work with an accountant, you get a person who can also assist you with your bookkeeping tasks along with the aforementioned analysis.
Consider MAS Partners for your small business accounting needs
Small businesses have a lot of potential to explore due to their dedicated employees and higher credibility. Many people believe in supporting small businesses, especially local ones, to support the local economy and have better quality products and services. You can benefit from this by relying on an experienced small business accountant in Sydney to reach the maximum potential of your business. Contact us here to learn more about our services.