Do I need an accountant or bookkeeper?

Very few small business owners enjoy doing paperwork. After all, shoving receipts into the bottom drawer and doing your tax every quarter is not exactly a productive (or fun) use of your time.

As your business grows, it becomes worthwhile to bring in a professional – a bookkeeper or accountant, or even both. Here are some tips on how to ensure you hire the right person for the job.

What do bookkeepers do?

Bookkeepers can assist with various tasks:

  • Processing invoices, receipts and other financial transactions.
  • Completing payroll obligations.
  • Reconciling accounts and maintaining ledgers.
  • Managing accounts payable and accounts receivable.
  • Reviewing accounting processes.
  • Calculating GST, and preparing and lodging business activity statements (BAS).

What do accountants do?

Accountants can perform all the same tasks as bookkeepers, as well as:

  • Advising and planning tax strategies.
  • Preparing company financial statements and reports.
  • Analysing business performance.
  • Completing income tax returns.
  • Preparing audits and corporate compliance.
  • Financial management and superannuation advice (depending on their licensing).

What are their qualifications?

Always check the qualifications of potential hires. Accountants perform more complex and strategic tasks, and are typically more qualified than bookkeepers. The highest level of qualification is a CPA (certified practising accountant). Anyone with an accounting-related degree is eligible to enter the CPA program. This is arguably the most difficult qualification to earn and can justify a higher billing rate.

The majority of a bookkeeper’s work revolves around recording transactions to prepare for BAS. For this reason, bookkeepers usually need certification from the Tax Practitioners Board as a BAS agent. To apply to become a BAS agent, they must have at least a Certificate IV in bookkeeping or accounting.

Accountants, on the other hand, must be certified by one of three professional accounting bodies in Australia: IPA, CPA or ICAA. To become certified, they must have a bachelor’s degree in accounting.

Compare costs

Because accountants are more qualified and can perform more complex tasks for your business, they are more expensive.

The hourly rate for a BAS-registered bookkeeper averages around $40–$80 per hour, GST inclusive. Junior accountants start at around $100 per hour, while senior partners in accounting firms can demand upwards of $400 per hour.

The bottom line

An accountant can perform a greater number of tasks for your business, but will be more expensive. A bookkeeper will cost less and may perform certain critical tasks. However, if they fail to get the basic data entry work correct, your business could be making key decisions with misleading information.

If you only need assistance in recording and preparing daily financial details, a bookkeeper will suffice. If you want analytical, strategic and reporting assistance, you will need to consult an accountant.

Employing a bookkeeper for basic functions while using a CPA or accountant for higher-level accounting could be the best strategy. If taking this route, you must ensure they can work well together. Consider asking them or your network for recommendations.

Growing your business requires getting your finances right. So let the professionals take charge of the books while you use your time more profitably.

If you need help with financing to grow, call Prospa on 1300 882 867 or apply online for a no-fuss small business loan.

The information in this post is provided for general information only and does not take into account your personal situation. Nothing contained in this post constitutes advice or an endorsement or recommendation of any kind by Prospa. Any links to third party websites are strictly for informational purposes only. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.