Many practice owners don’t understand the difference between a bookkeeper and an accountant. As a result they often find themselves in a position where they either rely on a bookkeeper to do their accounting work or they pay an accountant to do their bookkeeping. The ramifications of either action can have serious consequences. In order to know which is needed, it is important to understand why the tasks performed by each are different.
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The Role of the Bookkeeper
A bookkeeper is responsible for the regular upkeep of financial information relating to your practice. The tasks undertaken by a bookkeeper would usually involve:
- Processing payroll and painting staff salary information
- Preparing and processing invoices, receipts and payments
- Reconciliation of accounts
- Preparing financial statements to be provided to the accountant
- Managing all accounts receivable and payable
- Preparing and lodging GST activity statements
The Role of the Accountant
While an accountant is also able to execute all the tasks listed for a bookkeeper they are a more expensive resource and are therefore best kept in reserve for the tasks only they are able to conduct. The role of the accountant includes:
- Tax advice and planning
- Auditing and compliance checks
- Corporate reporting
- Financial management advice
- Superannuation fund management
While most private practices have a role for both the bookkeeper and accountant, it is generally not a successful plan to depend on one to provide the services of both. The best outcome is to have the bookkeeper and accountant working collaboratively to keep the costs down while still ensuring the successful financial management of your practice.[/membership]
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