Accountants and bookkeepers often seem to offer similar services, so what’s the difference between the two?
Usually, a bookkeeper will take care of your day-to-day financial tasks, such as processing invoices and receipts, chasing payments from customers, submitting VAT returns, running your payroll, and so on.
An accountant will then use the information produced by the bookkeeper to complete your year-end accounts and tax return, and may also advise on paying less tax or developing your business. They have an overview of your business finances, whereas a bookkeeper will really get into the nitty-gritty.
But it’s not always that simple – some accountants will also offer bookkeeping and payroll services as well as accountancy; if you go to a larger accountancy practice, it’s more likely that they will be able to take on your bookkeeping, whereas an accountant working alone might choose to concentrate purely on accountancy work.
On the other hand, some bookkeepers offer more than just the day-to-day tasks; you might find that your bookkeeper can also complete your Self-Assessment tax return, meaning that you don’t need to find an accountant as well.
There are no right or wrong answers here – you need to make a choice based on what’s best for your business. Here are some factors you could consider:
| Pick the items that describe you | You should be using |
|---|---|
| My business bank account has a lot of transactions each month | A bookkeeper |
| I struggle to get my VAT returns done on time | A bookkeeper |
| I’ve got loads of paperwork that I’d like someone else to deal with | A bookkeeper |
| I’m struggling for time to get everything done | A bookkeeper |
| I’m a sole trader and just need someone to keep me on track with HMRC | A bookkeeper |
| I want help moving to the cloud and automating my finances | A cloud accounting specialist – could be a bookkeeper or an accountant |
| My business is growing and I want to build a team to support that | Both an accountant and a bookkeeper |
| I have multiple business interests and need help to keep track of them all | Both an accountant and a bookkeeper |
| I want to reduce my tax bill | An accountant |
| I need someone to submit my Corporation Tax and Companies House returns | An accountant |
| I need a business plan and help with growing my business | An accountant |
| I need advice on how to structure my business – should I set up a limited company or stay as a sole trader? | An accountant |
| I’m thinking of buying or selling a business | An accountant |
| I need someone to work out how much my business is worth | An accountant |