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What is the difference between a bookkeeper and an accountant?

What’s The Difference Between A Bookkeeper And An Accountant

“Which is better, an accountant or a bookkeeper? What’s the difference?”

It’s something that business owners don’t always understand. This article outlines the typical role each plays, the fundamental differences between them, and how they fit into your business.


Bookkeepers are typically trained and qualified to compile accounts but not to file them or complete tax computations - in some cases bookkeepers can take additional qualifications that allows them to file accounts for a business under micro-entity (the smallest and most basic limited companies), but this isn’t usually the case.

An Accountant trains for longer, gaining more technical knowledge and understanding than a bookkeeper does. Additionally, an accountant is certified and qualified to undertake more complex activities than a bookkeeper does, such as reporting, management insight and filing accounts.


What roles do each play?

Getting your numbers from the day-to-day into a set of statutory accounts ready to file with Companies House is very much a process - with lots going on behind the scenes that you, the client, doesn’t really see. Think of an iceberg - you see the top of it but most of it is below the surface.


Bookkeepers typically take care of the first steps - taking your financial data such as:

  • Bank statements
  • Bills
  • Invoices
  • Receipts

The bookkeeper processes them into a tidy, coherent, and accurate system, as well as undertaking key control checks to ensure the data is error free. In short, your bookkeeper keeps your house in order.

Bookkeepers may also be responsible for:

  • CIS returns
  • Pensions and Payroll
  • VAT returns

It’s worth noting that the competence and qualifications of bookkeepers vary - some bookkeepers can even file Micro-entity accounts, but this depends on what they’re qualified to achieve. Confirmation of what their qualification covers should be requested before engaging with a bookkeeper.

This system and the accurate data it now contains is the basis for everything to follow. This data is then passed on from the bookkeeper to the accountant.


Typically, an Accountant then takes this system from the bookkeeper and builds on it by undertaking technical work to get the data into a statutory format - this includes things like:

  • AML compliance
  • Capital allowances
  • Complying with company law
  • Corporation tax
  • Dealing with fixed assets
  • Debentures
  • Depreciation
  • Dividends
  • Equity injections
  • Filing accounts with Companies House
  • Financing
  • Legal status
  • Loans
  • Tax law

Additionally, an Accountant will provide management and strategic insight, for example,

  • Budgets or projections
  • Cash flow statements
  • Management accounts

Accountants are trained to draw conclusions from results that can assess the financial health of a company and identify areas for improvement and growth.


How does this typically work in practice?

Most businesses will utilise a Bookkeeper and an Accountant - whether they realise that or not. Either by employing / engaging a bookkeeper on a regular basis then handing over to an accountant at the end of the year, or by engaging an accounting firm to handle everything. An accounting firm can have both accountants and bookkeepers that handle different parts of your work.


What is the advantage of utilising both?

The key advantage is that it saves your business money. The difference between a bookkeeper’s time vs an accountant’s is quite different. By using a bookkeeper for basic tasks, and an accountant for more complex tasks or to provide insights, you’re getting value for money.

Another advantage of using a bookkeeper is that you're using current, clean data that allows your accountant to give you informed advice quickly. By not using a bookkeeper, then taking your information to an accountant for an opinion on your business, will cost you more money because they will need to organise your accounts first.



Accountants and bookkeepers work best together. A bookkeeper is responsible for the day-to-day financial transactions of a business, such as invoices and bills. Whereas an accountant builds on the information provided by the bookkeeper and handles more complex tasks, such as analysis, reporting and filing accounts.

Whether they work in the same firm or are outsourced, they depend on each other to give you, the client, relevant information and keep you compliant. The job for you as the client is to ensure you have the right bookkeeper and accountant for your business!



Blog by CALA Associates

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