17 Oct Bookkeeper Vs Accountant?
So you have set up in business and now money is going out and coming in and you need to keep track right? Many people think that they immediately need an accountant, but is that really the case?
Well, there really is no right or wrong answer.
- You may choose to employ an accountant. Someone to manage everything from your bookkeeping through to your year end accounts. Whilst this is perfectly feasible it may work out as rather a costly way of doing things.
- Perhaps you decide to do all of your bookkeeping yourself. This may save money but how cost-effective is this on your time?
- Alternatively, you may choose to outsource your accounting procedures to a registered bookkeeper. They will provide this service at a cheaper cost than an accountant whilst still remaining within the realms of the money laundering law.
- You may look to delegate these tasks to an in-house member of staff. Beware! Unless the member of staff is a registered bookkeeper or accountant this is not recommended and is against money laundering laws.
If you choose to outsource ANY of your financial procedures you must ensure that the provider is a member of a relevant professional body. This means that the provider has a practice license. A practice license includes indemnity insurance and cover under the money laundering laws. Alternatively, if the provider is not registered with a professional body, then they are required to register directly with the money laundering service. This ensures that everything is legal and above board. It is not permitted for anyone, be it a financial service provider or indeed an in-house employee to enter financial transactions ANYWHERE unless they are registered with money laundering service.
Registered bookkeepers come with varying levels of qualifications. They will either be registered with the Institute of certified Bookkeepers, (ICB) or the International Association of Bookkeepers (IAB). The level of qualification held by the registered bookkeeper determines the services that they are able to offer. Registered bookkeepers can conduct your data entry, ensuring the balancing of your books. They reconcile your monthly accounts with your bank. They may produce VAT returns or even non-official reports for you. Some registered bookkeepers are qualified to provide payroll services, self-assessment tax, and costings and budgeting. If you do choose to utilise the services of a registered bookkeeper, they can offer the same professional service for the tasks detailed as an accountant whilst invariably being more cost effective.
Accountants can also provide the bookkeeping services detailed above. Using an accountant to complete these services is likely to be a far larger expense than if you used a bookkeeper for your day to day accounting requirements. In addition to the services of a bookkeeper, an accountant can produce your year end accounts, conduct your annual return filing, your corporation tax return. They can even provide you with official detailed reports about the financial status of your business. Reports such as profit and loss. As well as providing tax filing and tax planning advice.
So when looking for help with your finances you need to consider several things. The cost benefits of a registered bookkeeper. The appropriate tasks outsourced to your accountant. You also need to consider the security of using a registered professional. Whatever you do – make sure your accounting is completed by an appropriate person. The legalities of failing to comply with money laundering laws could leave you facing criminal prosecution.
For help and advice with your bookkeeping or accounting please talk to us for more information.