We take a look at each of these roles, how they can help, and the key things to consider when you’re looking for finance expertise to help grow your business.
The basics: accounting vs bookkeeping
Like many other areas in business, the finance function has evolved. The traditional tasks of bookkeepers and accountants have expanded, and along with that, their role in a business. When deciding what help you need for your business, it helps to have a good understanding of the fundamental roles of both a bookkeeper and an accountant.
A bookkeeper is responsible for recording and tracking financial transactions in a business in a consistent, accurate way. Also known as ‘keeping the books’, they manage the processes associated with financial transactions. This can include:
Effective bookkeeping processes help manage your day-to-day business operations and build a solid foundation for your finance function.
An accountant is responsible for managing and reporting on financial information of a business. Using the information gathered during the bookkeeping process, accountants are responsible for two key areas:
What about the Financial Coach / Virtual CFO / Finance Strategist?
Beyond your traditional bookkeepers and accountants, you’ll also find several other finance types to help with your business. While each service can vary, they tend to be provided by qualified accountants who can help you manage the financial health of your business. This tends to fall under the ‘management accounting’ category as they help business owners and management teams make better decisions for the business.
Choosing the right financial expert for your business
When it comes to finding the right financial help for your business, we recommend getting clear on where your business is now, and where you want it to go. Consider the gaps, what areas need improving, and the type of external expertise you might need. Some key things to keep in mind include:
- Good bookkeeping benefits both the tax accountant and management accountant. Getting this process right will help feed accurate, compliant, and timely numbers that inform the analysis, insights and reports done by your accountant.
- A good tax accountant does not necessarily make a good management accountant. While qualified accountants can do both, they do require different skill sets and they offer different insights. For example, tax accountants have an external view around your obligations to the tax office, while management accountants have a more internal view with a focus on your business goals.
- While tax accountants are generally external service providers, bookkeepers and management accountants can be in-house, outsourced, or a combination of the two. Each option has its own benefits and challenges, with the right fit depending on your business size, complexity, goals, and capacity to manage additional headcount.
- Consider the benefit of keeping your bookkeeping and management accounting together. Managing the day-to-day operations helps people get an in-depth understanding of your business, which can then be fed into insights that go beyond the numbers.
While every business has a tax accountant, not every business has a management accountant. If you’re looking to grow your business, management accounting can be a valuable tool to help you make better business decisions to help your business get there.
If you’ve ever wondered about the differences between an accountant and bookkeeper, we hope you’re now clearer on what role they can play in your future growth. To find the best fit for your business, we suggest interviewing any potential service providers to see what level of financial support they can provide, and whether this aligns with your business goals.
At Slate Accounts, we offer both bookkeeping and management accounting services for established businesses looking to reach their next level of growth. If this sounds like you, reach out to our team for an obligation-free chat about how we can help.