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Bookkeeper vs. Accountant

15/7/2016

2 Comments

 
We’re not at war, I promise! Bookkeepers and accountants are not competing for the same work, their roles a very complementary to each other and both have an important role in your business.

An accountant prepares your tax return at the end of the financial year. They view your business on a more holistic level, using their expertise to find the ways to manage your tax and save you money.
  
A bookkeeper handles the financial side of your business year round, from the day to day, to getting figures prepared and ready for the accountant at the end of financial year.

There are a few areas where accountants and bookkeepers can overlap. A bookkeeper who is a Registered BAS Agent is qualified to lodge your BAS’s and IAS’s (see previous blog ‘Is your bookkeeper qualified?’). Your accountant is a Registered Tax Agent and they are qualified to lodge your BAS’s and IAS’s as well as your tax return. In terms of Payroll, preparation of your employee PAYG Summaries can be prepared by your accountant or bookkeeper. 
 
A bookkeeper and accountant work together to fulfill the financial obligations of your business. You cannot replace an accountant with a bookkeeper and if your accountant is doing your bookkeeping I’m sure they are doing a great job, but that you are paying a hefty sum for it!

I speak to a lot of business owners and a lot of accountants. The primary complaint many business owners' have about their accountant is often fees. They do a great job, but why does it cost so much? Accountants charge by the hour and because they are specially trained, their hourly rate is often high. If your accounting invoice is higher than expected it is often because your accountant has had to spend a lot of time ‘bookkeeping’ that is, checking and changing your figures. The accountants I have spoken to actually don’t like giving you a giant invoice, but if they had to do the work, they have to charge for their time. So what’s the solution? Bookkeepers. We’re qualified and cheaper than your accountant. Plus bookkeepers who are Registered BAS Agents can lodge your BAS’s and IAS’s too saving you even more money! And the less time your accountant has to spend bookkeeping the more time they can spend doing what they do best, saving you tax!

Don’t worry, your accountant wont be offended if you get a bookkeeper, on the contrary. Having a fastidious bookkeeper means that your accountant can rely on the accuracy of the figures we present to them. We can do things like account for assets and reconcile balance sheet accounts, things that the average business owner may not really understand or have the time to do. This means your accountant doesn’t have to do it! An accountant only sees your figures once or a few times a year and usually at the busiest times. If things have been coded incorrectly and the accountant misses them in the small amount of time they have to review the figures you may have missed out on a tax deduction. And if he or she does take the time to review the figures in detail? There’s that giant accounting bill again. 

Accountants and bookkeepers have complementary training and qualifications designed to cover all aspects of financial compliance for your business. Don't be afraid to speak to your accountant about whether a bookkeeper will be a beneficial addition to your business.  
2 Comments

Is your bookkeeper qualified?

16/6/2016

 
Although I have been posting about bookkeepers in general, I wish to use this time to stress that there are 'bookkeepers' and then there are 'qualified bookkeepers'. So what's the difference? 

​Up until about a decade ago the financial services industry was largely unregulated. Bookkeeping itself required no qualification meaning anyone could do it, regardless of expertise. With the implementation of GST, ever-changing tax laws and only the law of increasing disorder to adhere to, the financial services industry descended into the Wild West - full of incompetent and shonky bookkeepers, accountants and financial advisors.

But in 2009 the government introduced legislation outlining certain standards and regulations that those in the financial services industry must abide by as well as sanctions to discipline and hold accountability to agents who did not adhere to this Code.

​One such requirement put in place for bookkeepers is that any bookkeeper who is not working for you directly as an employee must be registered as a BAS or Tax Agent with the Tax Practitioners Board. Although this might seem like a technicality, it is very important when it comes to the reporting of your financial information. If you have a bookkeeper who is lodging your BAS’s and IAS’s on your behalf and they are not registered, then YOU are solely responsible for the information that is being supplied to the ATO. Using a Registered BAS Agent means that the Agent is responsible for your lodgements and assumes a level of responsibility to the accuracy of the information that is being presented.

To be a Registered BAS Agent, you must have a bookkeeping qualification and meet a certain level of experience as well as maintaining a minimum level of continuing professional education (CPE). You must also agree and adhere to the Code of Conduct which states that an agent be competent, honest, abide by all Tax Laws and act in the best interest of their client.  

To read more about the Tax Practitioners Board and required Registrations, click here

To check if your bookkeeper is registered with the Tax Practitioners Board, click here

A bookkeeper can be registered as an individual or under their practice or business name. You can also search via their registration number if they have it listed on their website, business card, etc.

Do not be afraid to ask your bookkeeper about their qualifications. It’s better to be safe than sorry!
​

Does your business need a bookkeeper?

1/6/2016

 
It's never to early to enlist the support of a bookkeeper, especially nowadays with the benefits of the cloud. But during the initial start up stage a lot of business owners decide to take on the bookkeeping responsibilities themselves or be assisted by a family member. This is usually a financially motivated decision made to save on initial costs and rightly so, it's important to ensure you have a stable business before adding additional expenses to the mix. 

Considering that second scenario, let's assume you lay a great foundation and your business becomes successful. Soon you’re hiring staff, buying more, spending more, things are getting busier and busier. Congratulations! You are reaping the rewards of all your hard work. Although you love working in and on your business, you’re finding that you’re spending what small amount of down-time you do have catching up on paperwork: paying bills, paying staff, getting invoices out so you can get money in. Or perhaps that family member is finding it difficult to keep up with the demand while juggling their own schedule. What used to be easy and fun has now become burdensome... and the stress is creeping up. Doesn’t being the boss mean you’re in charge? Aren’t things supposed to be getting easier? There just don’t seem to be enough hours in the week to be able to get through it all and not only is the workload getting bigger, things seem to be increasing in complexity too. You just can’t seem to shake a niggling feeling that you could be unknowingly missing important financial deadlines, or making mistakes that could mean the ATO come knocking at your door…

This is where it is a good idea to contact a bookkeeper. You should be running your business, your business shouldn’t be running you! A bookkeeper can assist in as many or as few of the administrative tasks you require. Perhaps you like preparing your own invoices, but you find payroll scary, or you’re at the point that you want someone to look after the whole financial side of things. A bookkeeper is there to make running your business easier and can offer services in whatever capacity you require. Working on your business throughout the year means we understand it. We know when payments are upcoming or due, we can manage cash flow and schedule payments so you don’t have to worry about unforeseen tax bills, superannuation, insurance payments etc.

If you’re time-poor, the financial side of your business is becoming a headache or you're feeling a bit out of your area of expertise, do yourself a favour and enlist the help of a bookkeeper. It's one of the best business decisions you can make!

 The benefits of a bookkeeper  

15/5/2016

 
When a say I’m a bookkeeper, most people think I’m a bookie and can offer some insider betting tips... ahh afraid not.  Although the terms are similar, the professions are poles apart, I assure you!

So what does a bookkeeper do? A bookkeeper has an important role in the operation of a successful business by managing the financial side of the business all year round. We pay your bills, prepare your invoices, pay your staff, manage your cash flow, lodge your BAS’s and IAS’s (…some of us, more on that later) and ensure your business is financially compliant. We reconcile and review your accounts and accurately prepare figures that your accountant then uses to lodge your tax return.

Your business benefits from having a bookkeeper by having a qualified and responsible person overseeing the financial operations of your business throughout the year. We do the basics, but we also keep abreast of changes in reporting and compliance that may otherwise get missed. If your business is growing, your tax responsibilities may be changing. A bookkeeper monitors this so that your business doesn’t fall through the cracks and unknowingly become incompliant… avoiding potential tax ‘surprises’!

A bookkeeper can also prepare management reports, measure staff productivity and help you to analyse and understand your business beyond the ‘money-in, money-out’ gauge.

Most importantly, a bookkeeper makes your life and your accountant’s life easier!

    Author

    Ainsley Tesoriero

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 Reed Accounts Pty Ltd  -  Bookkeeping and Administration Services  -  Balgowlah, Northern Beaches, NSW  -  Contact Us
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