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What is the difference between a Bookkeeper and an Accountant?

This is a great question, most people think that we are the same thing.

We like to use the analogy that the difference is very similar to a Nurse and a Doctor, you wouldn't put them on the same level yet you understand a nurse knows medicine and has picked up extra medical knowledge during their career.

This is the same for Bookkeepers and Accountants, a bookkeeper is someone who enters all your day to day accounting data (sales, purchases, bank transactions, payroll journals, submit VAT and CIS returns, etc.) in to your accounting system. We can advise you on your expenses and give you an overview on how your company is doing at a specific point in time.

An Accountant will be able to look at your books and advise you where you could save money, how you could make your company run more efficiently, if changing your business to a partnership or limited company is advisable and an in-depth knowledge of the tax systems.

How does a bookkeeper and an accountant work together?

Usually there are very clear roles between them. Which are as follows:-

Bookkeeper (not limited to the following)

  • Process purchase receipts and invoices

  • Create sale invoices

  • Match bank transactions to purchases and sales

  • Look after the transactions of 3rd party payment providers e.g. Stripe, WorldPay, Klarna, cash tin transactions

  • Process VAT

  • Process CIS and send subcontractor monthly statements

  • Credit Control

  • Process supplier payments

Accountant

  • End of Year accounts

  • Process Corporation Tax

  • Advise on how to be tax efficient