The truth is, to keep a business successful you’ll need great bookkeeping and great accountancy. Those roles are not the same but they’re similar enough to cause confusion. We’ll explain the differences here.
What’s bookkeeping?
Bookkeeping is the most common essential element of all business types. At a basic level, having a handle on what’s coming in and going out. It’s about keeping records.
Bookkeeping involves:
- Recording financial transactions
- Posting debits and credits
- Producing invoices
- Preparation of financial statements (balance sheet, cash flow statement, and income statement)
- Maintaining and balancing subsidiaries, general ledgers, and historical accounts
- Completing payroll
What’s accounting?
Accountancy is about taking the data from the bookkeeper and using it to further the business through analysis, tax planning and reports.
Accounting involves:
- Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
- Reviewing company financial statements
- Analyzing costs of operations
- Completing income tax returns
- Aiding the business owner in understanding the impact of financial decisions
What’s the difference between a bookkeeper and an accountant?
Bookkeepers and accountants sometimes do the same work, but have a different skill set. In general, a bookkeeper’s role is to record transactions and keep you financially organized, while accountants provide consultation, analysis, and are more qualified to advise on tax matters.
Many accountants began as bookkeepers and many will offer bookkeeping services, but bookkeepers are not accountants.
What’s required to be a bookkeeper and accountant?
Bookkeepers have been around as long as business has existed and some very competent bookkeepers have no formal qualifications. All good bookkeepers will have a gift for figures, a keen eye for detail and an organised methodical approach. Qualifications for advancing bookkeepers include ATT and ICB (Institute of Certified Bookkeepers).
Accountants undergo further training and development to achieve qualifications in their specialism. The minimum requirement in the UK is the AAT level 2 (Association of Accounting Technicians) course. Further qualifications and ongoing professional development will be required as accountants go on to ACCA and/or CIMA qualifications which associated with Chartered and Management accountants respectively.
Which do we offer?
At the SMART business hub we offer both bookkeeping and accounting services. We also pride ourselves on our SMART business advice – we want you to understand your tax and financial affairs just as much as we do.
For further information on our bookkeeping services visit here https://thesmartbusinesshub.co.uk/services/bookkeeping and for accountancy information see here https://thesmartbusinesshub.co.uk/services/bury-st-edmunds-accountants
If you’re a small business just starting out and aren’t sure which services you need, give us a shout here https://thesmartbusinesshub.co.uk/contact-for-bookkeeping-accounts we’d love to hear from you and help.
