If you decided to outsource your bookkeeping would you choose a bookkeeper or an accountant? It can be confusing because many accountants offer bookkeeping services and therefore are a one-stop shop for your bookkeeping and your tax return or statutory accounts. Bookkeepers provide bookkeeping services (and tax returns in some cases) and do not offer the services which accountants offer because they are not qualified tax advisers.
So you might think that an accountancy firm is the best solution because they can offer all the services you need, whereas if you use a bookkeeper you will need to have an accountant as well. So it seems obvious to choose an accountant and you probably think it will cost less to have one professional rather than two but that is not necessarily the case. Of course it depends on how much bookkeeping you need and if it is very simple then it probably is more cost effective to use an accountant to do everything. But if you need someone who can be, and wants to be, more involved with your business then it is worth using a bookkeeper for the regular work.
Bookkeepers deal with the day to day transactions of a business ensuring everything is recorded accurately and consistently in the accounts. If a business is VAT registered the bookkeeper will ensure that the correct VAT codes are used and will prepare and submit monthly or quarterly VAT returns as required. A bookkeeper will ensure your debtors (customers owing) and creditors (suppliers owed) are accurate and will ensure you are kept up to date with this information.
For one of the businesses we work with we raise and send out 2,000+ invoices every year. Is this something you would ask your accountant to do? Would you ask them to make amendments/resend/add a credit note/allocate a payment/bank a cheque payment? We do all this for one of our customers as well as respond to all their finance emails and deal with the day to day bookkeeping.
For another business we pay their suppliers as and when needed and manage their cash flow. Is this something your accountant would want to do?
There are all sorts of tasks that we willingly do for our customers to make their life easier. One client was recently hospitalised after an accident and needed help to sort out the insurance claim. Another needed advice on what it would actually cost each month to take on an employee.
Bookkeepers work quickly and efficiently whatever the business. They produce accurate and up to date accounts at the end of every year for the accountant to complete the statutory accounts. If you have a good bookkeeper they will make keeping your accounts so much easier and because they know what they are doing an accountant should not need to make any adjustments to the content of the accounts. Whilst an accountant can just as easily do what a bookkeeper does they will generally charge more because of their additional training.
I think it is important that a business has both a bookkeeper supporting them and an accountant advising them and providing compliance services because each have knowledge and experience in their own fields. This does not mean that you will pay double costs. When you are obtaining quotes for bookkeeping and accountancy services it is worth asking an accountant for the split between bookkeeping (including VAT returns) and accountancy so that you can compare like with like.
We are working with businesses whose bookkeeping costs have reduced by half or two thirds of what they were paying. So it is always worth checking out the costs of having both a bookkeeper and an accountant because you may be pleasantly surprised that the cost is not what you might have expected. And always consider having your accounts done remotely as this can work out more cost effective for your business.
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