What is the difference between a Bookkeeper and an Accountant

One of the questions I get asked the most is....

"What is the difference between a Bookkeeper and an Accountant?"

Quite a difficult one to quantify as we are all different but basically the following applies - hope it helps.... 

A Bookkeeper helps to organise the best accounting system and ensure it is correctly prepared and updated at regular intervals i.e weekly, monthly or quarterly.

The process of recording daily transactions in a consistent accurate way, and is a key component to building a financially successful business. 

Bookkeepers must be supervised for Money Laundering regulations - typically through the membership of a professional body, along with insurance and being registered with ICO (Information Commissioners Office).  

A 'good' Bookkeeper will be accurate and knowledgeable about key financial topics and cover the following areas and maybe others: 

 • Recording financial transactions

 • Keeping Customers and Suppliers information up-to-date

 • Producing invoices

 • Maintaining and balancing subsidiaries, general ledgers, and historical accounts

 • Bank Reconciliations

 • Credit Control  

Accountants use high-level processes using the financial information compiled by a bookkeeper or business owner, and produces financial accounts using that information.

Accountants provide reports that bring key financial indicators together. 

The result is a better understanding of actual profitability, and an awareness of cash flow in the business. Accounting turns the information into statements that reveal the bigger picture of the business, and the path the company is progressing on by: 

• Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)

• Preparing company financial statements

• Analysing costs of the business

• Completing Business tax returns

• Aiding the business owner in understanding the impact of financial decisions


In Summary:

Bookkeepers and Accountants both help support the business at different stages, however the roles of can have some cross over as Bookkeepers, depending on their experience, can also do all and/or most of the roles an Accountant can do.

It really is up to you and your requirements as to which option you decide on but it's always worth speaking to a Bookkeeper and not automatically seeking out an Accountant first. 

I hope this has helped to explain the differences and if I can help, please get in touch.