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 In Finance

Hands up the small business owner or tradie who likes doing paperwork? Shoving receipts into the bottom drawer and doing your own tax every quarter is not exactly a productive (or fun) use of time.

As your business grows, at a certain point it will become worthwhile to bring in a professional – a bookkeeper or accountant, or even both. Here are some tips on what to look for to ensure you get the right assistance.

What do bookkeepers do?

First and foremost, what kind of financial help does your business need?

Bookkeepers can assist with various tasks:

  • Processing invoices, receipts and other financial transactions
  • Completing payroll obligations
  • Reconciling accounts and maintaining ledgers
  • Manage accounts payable and accounts receivable
  • Review accounting processes
  • Calculate GST, and prepare and lodge Business Activity Statements (BAS).

What do accountants do?

Accountants can perform all the accounting tasks that bookkeepers do, 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?

Don’t forget to check the qualifications of whoever you decide to hire. 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 the BAS. For this reason, bookkeepers usually need to be certified by 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, need to be certified by one of the three professional accounting bodies in Australia; the IPA, CPA, or ICAA. To become certified, they must have a bachelor’s degree in accounting.

Comparing on cost

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

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

The bottom line

An accountant will be more qualified and can perform a greater number of tasks for your business, but will be more expensive. A bookkeeper will cost less but performs critical tasks nonetheless – if they fail to get the basic data entry work done correctly, 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. However, if you want analytical, strategic and reporting assistance, you will need to consult an accountant.

Ultimately, employing a bookkeeper for the basic functions while using a CPA or accountant for higher-level accounting issues could be the best strategy. You will also need to find a bookkeeper and accountant who can work together, which may come down to asking them or your network for recommendations.

Growing your business means getting the finances right – and that means letting the professionals take charge of the books while you use your time more profitably. And if you need help with financing to grow, talk to online lender Prospa for a no-fuss business loan.

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