A bookkeeper records all the financial transactions of the business by entering them into the “books” on a day-to-day basis. The books are the financial records of the business. In the past, the records were kept in a book, hence the name bookkeeper. Different kinds of books include the cashbook, daybook, journal or ledger.
Bookkeepers are required to classify transactions into the correct accounts as previously determined by the accountant and business owner. A final check in the bookkeeping process is called a ‘trial balance’. This summary ensures that the financial transactions have been correctly recorded. At this point the bookkeeper usually hands the system over to the accountant who performs the second stage of the accounting process – the analysis and reporting.
Having up to date book is essential for any business as monthly management accounts created by a bookkeeper shows the financial state of the business over the last few weeks. This can be essential in helping analysing what is working and what is not working in the business. Accountants created by an accountant are official documents which are created retrospectively often 12 months later.
Accountants deal with the big picture. They are highly qualified individuals, usually with a university degree and a professional, post-graduate qualification. Accountants interpret the financial information provided by the bookkeeper. Their range of Advice includes evaluating the efficiency of the business operations, cash flow and profit forecasting as well as auditing to ensure the accuracy of financial information.
Clearly if the books are not maintained accurately and correctly, the accountant cannot interpret them with any degree of validity, and similarly, bookkeepers do not have the qualifications and expertise to maximise the business’s financial assets. In other words, it is important to use the correct person for the job. Do not use your accountant to write up your books – it is too costly. By the same token, do not use your bookkeeper to interpret your results as they are not qualified to do so. That is why we, as bookkeepers, are partnered with a top firm of chartered accountants, Moore Stephens in Southampton. However, you do not have to change your accountant or even your bookkeeper to use our services and expertise.
Please see our cost benefits page on minimising your company’s costs and maximising its efficiency through the correct use of accountants and bookkeepers. You may be wasting your hard-earned cash!
If you have any question or comments on the difference between a bookkeeper and an accountant please do post below and we will get back to you as soon as possible.
