Category: Accountancy

Bookkeepers and accountants working in harmony? Does this happen in reality or is this pie in the sky? Many people aren’t really sure what a bookkeeper’s role is and what an accountant does. In the latest blog from team4, our aim is to clear up any confusion you may have. We look at the different roles and what each job entails and highlight some areas where the two job descriptions overlap. One thing is clear at the outset – both functions are extremely important for any business and maintaining healthy business finances is a key ingredient for success.

General descriptions of a bookkeeper and an accountant

It’s true that bookkeepers and accountants do some of the same work. In general terms, both handle financial data. A bookkeeper will record transactions and keep your financials in order maintaining day-to-day records keeping these tidy so the accountant can do their job. Alternatively an accountant is there for compliance and as a tax advisory using the bookkeepers’ figures. They will interpret, classify, analyse, report on and summarise the financial data.

The role of a bookkeeper

• Recording and categorising financial transactions
• Posting debits and credits
• Compiling and sending invoices
• Completing payroll
• Maintaining and balancing ledgers and accounts
• Preparing and filing VAT returns
• Providing basic tax advice

 

The role of an accountant 

• Preparing entries and financial statements
• Completing income tax returns
• Financial analysis and strategy
• Tax strategy and planning
• Corporate financial reporting and compliance
• Preparation of business plans and cash flow forecasts

 

The overlapping roles of accountants and bookkeepers

The line between bookkeeping and accounting functions is slowly diminishing and with the advancement of cloud bookkeeping software such as QuickBooks, Sage and Xero, some parts of accounting are being absorbed into the bookkeeping role. The software can also generate financial statements, which were once part of the accounting process. It also means bookkeepers can add value-added services including payroll processing and management account reporting.

 How team4 works with your accountant

We believe in working together with a client’s accountant. Our aim is to ensure a close working relationship. We prefer a chat right from the outset with your accountant so that the transition is seamless and we want them to be involved in any relevant meetings, which we believe is better for you. By involving them initially, we’ll see how they want us to work. This we believe results in the perfect scenario of bookkeepers and accountants working in total harmony for the benefit of your business.

Accountant – Client – Bookkeeper

What can team4 do to help your business?

Reliable and trusted bookkeeping services are essential for a thriving business. Bookkeepers lay the groundwork for accountants providing detailed and accurate data, which is essential for the accountant to do their job. If you would like a chat with a ‘no fuss’ bookkeeping team who will cut out the jargon, why not get in touch with the experts at team4? Please call us on +44 1825 763378 for more information or email info@team4bookkeeping.co.uk

Is it really possible to be a bookkeeper and an entrepreneur at the same time? Bookkeepers are generally considered to be super nice people. It’s also a profession that women predominantly do, sometimes as a part time role, often working from home. It also tends to be associated with drinking lots of tea and coffee. Not much wrong with that! But can bookkeepers be classed as entrepreneurs or associated with entrepreneurship? In order to answer the question, it’s necessary to define the word and the concept and look at the characteristics individually?

What Is an entrepreneur? 

Investopedia: An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures.

Key Differences: An entrepreneur is someone who locates the need of society and tries to meet the same, with their innovative idea. A creative idea is conceived and all the necessary steps are taken to convert the idea into reality. This would include putting up the capital, the workplace, labour and all the essential resources to produce the product, whilst bearing all the risks so as to gain profits in the future. Entrepreneurship refers to the process of establishing a business entity, intending to get profit, as a future return.

The following apply to a freelance bookkeeper:

• Taking a risk by setting up a company
• Seeing and seizing a new opportunity
• Taking advantage of technology
• Understanding the mechanics of running a business
• Having ambition, motivation and enthusiasm
• Desire to develop a business
• Thinks differently – searching for new ways of doing things
• Necessity to be agile and adaptable

So are bookkeepers entrepreneurs?

Could it be said that ‘number crunchers’ are not naturally inclined towards being risk takers? But by establishing a company, you are surely taking a risk? You are certainly addressing the needs of society and making your vision a reality. Becoming a bookkeeper certainly fulfils entrepreneurship by establishing a business entity, intending to get profit, as a return in the future. Where it might fall down is in the creativity and innovative element, but anyone who deals with numbers knows that you have to be very creative at times!

No two entrepreneurs are the same!

However, if you put a selection of so called entrepreneurs into a room together, they would certainly have lots of things in common including being resilient, agile, tenacious and passionate, all of which apply to bookkeepers. (They would also undoubtedly have traits that were quite dissimilar.) Bookkeeping is a fast moving profession and therefore involves being agile, adaptable and determined. Perhaps you could say that where entrepreneurs differ is in the personal risk, the size of their vision and goal. And if bookkeepers are not entrepreneurs, they are certainly a valuable business asset, a sounding board and at times a shoulder to cry on. It’s true that bookkeepers are closer to their clients than almost any other business professional.

What does team4 think?

So it’s yes and no! But definitely more yes than no. In many respects we feel bookkeepers are entrepreneurs. We would love to hear what you think. However, entrepreneur or not, one thing is clear, we would love to encourage more young people to see bookkeeping as a profession and as a destination, not a stepping stone to becoming an accountant. It’s a career that can take you anywhere if you have ambition and is a lot more versatile than accountancy. By working as a bookkeeper with other business owners you will learn so much about how to run a business and how not to, and bookkeeping can take you anywhere. All you need is the vision.