A well-run business is likely to make use of both accountants and bookkeepers. The division of labor is important. Here’s how it might work:
- Company formation
As noted in our guide about hiring an accountant, you should use an accountant to help you set up your business. Accountants can also help you create your business plan, cashflow budget and forecast as well as set up a company structure that best suits your business and minimises your tax liabilities.
- Accounting systems
An accountant or bookkeeper can also help you choose the right accounting software and set it up so that it works well for you and your employees. There are a huge selection of new cloud systems that have a list of other add-ons that can further improve efficiencies in your business and save you money, so make sure the accountant or bookkeeper you choose to help you is well versed with cloud accounting systems.
- Bookkeeping work
Once all your company and systems are set up a bookkeeper is the person you can turn to to keep all of your business financial up to date and in order on a daily basis. They are key to helping ensure that you always have a good cashflow and real time data upon which to base your business decisions.
- Accounts reconciliation
Ideally the accountant and bookkeeper will get together regularly, perhaps once a month. They might meet in person or they might work remotely, using cloud accounting software with shared access. Either way, the accountant will look at the figures in the accounts and the bookkeeper will explain any numbers and decisions that aren’t clear. This is why it can be a great benefit to use a bookkeeper close to or within your accounting firm. The accountant can then report on the figures, highlighting any issues or potential opportunities for business improvements.
The accountant will report to the business owner. This is where the accountant should really add value to your business, they can review the business figures in terms of previous results, your goals and project what would happen should your business continue along it’s current trend. The accountant will report on the state of the accounts so that the owner have a clear picture of the financial health of the business. A bookkeeper can also provide reporting, but in a less formal way on a more regular basis with what is called management accounts. These reports are often used by the business owner as checkpoints to see where the business is going often in a weekly basis.
Armed with up-to-date figures, the accountant will make recommendations to the business owner . The accountant will offer advice about any planned expansion and investment. They will also advise on whether the business can afford to move into new markets and other financial strategies
- Legal compliance
The accountant will use the information prepared by the bookkeeper to write to complete any quarterly BAS requirements and end of year tax returns and accounts. These reports will include information about income and expenses, net profit, assets, liabilities and tax. The accountant will also file the company tax return forms and arrange for tax payments to be made.
This is a sensible way of sharing the workload. The accountant does the work that they have been trained to do, while the bookkeeper provides the necessary financial data.
If you want a winning team to help drive your business success then speak to us today, with our in-house bookkeeping team providing bookkeeping services from just $30 per hour and our experienced accountants using the information to drive forward significant business improvements, we more than cover the cost of our service.