Do I need an accountant or bookkeeper or both?

It can be hard to know if you need an accountant or a bookkeeper to help you make sure you’re running your business properly. Who is best to help you manage your cash flow and keep things in order for the ATO?

Accountant vs. Bookkeeper: What’s the difference?

Accountants and bookkeepers have common goals, but service different stages of your financial cycle.

A bookkeeper does tasks like:

  • Recording and reconciling transactions

  • Issuing and chasing invoices

  • Running payroll 

  • Keeping day-to-day records in order.

An accountant will:

  • Prepare financial statements 

  • Assist with completing your tax returns

  • Undertake audits

  • Analyse strategic financial matters, like operating costs and forecasting

Working with an accountant also gives you an extended deadline for the submission of your BAS and tax returns. 

Which do you need? 

Whether you need an accountant, a bookkeeper, or both largely depends on the type of freelance business you’re running. 

Start by asking yourself: “How often do I need financial guidance?” 

If you run a complex business and need help with transactions every day or several times a month, a bookkeeper will be an excellent asset for your freelance operation. 

However, if you are a sole trader with straightforward finances, and simply want someone to check over your work and ensure you’re meeting your tax obligations, an accountant may be a better solution. This is particularly true if you use an accounting app like Rounded to issue your own invoices and track your income and expenses. 

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Some professionals may offer both accounting and bookkeeping services under one umbrella—this is an excellent option for anyone who needs assistance with day-to-day operations and quarterly or annual tax obligations. 

Tips for working with an accountant or bookkeeper

Accountant Stacey Price from Healthy Business Finances had some great advice. 

“Be clear about what you need, “she says. “Do you want one-off help, ongoing weekly or monthly services, or an annual workup? Write down what you need, then look online and start asking your contacts for recommendations to find the people who have the skills that fit your list. For example, don’t hire a bookkeeper if you need a tax return, and don’t hire an accountant if you need financial data entry.”

She also reminds us that bookkeepers can help you make even better use of your accounting software. They will be able to advise you on ways to optimise your usage of the program, or even recommend other handy apps and platforms to make your accounting even more efficient. 

“There are two services accountants provide that are often overlooked,” Stacey says. “They can help with tax planning and business structure advice, which often go hand in hand. As your business grows and expands, they’ll help you make sure you are in the most effective business structure from a tax perspective and may offer guidance around asset protection as well.” 

How Rounded makes it easy to work with an accountant or bookkeeper

If you’re a Rounded user, working closely with a financial professional is simple. 

You can grant your accountant or bookkeeper access to your Rounded account, so they can easily see your income, expenses, and receipts. They can check in regularly to ensure everything is in order, and provide guidance when tax season rolls around. 

Rounded provides extra layers of security, and you’ll retain total control of your account—if you change accountants or bookkeepers at any time, it’s simple to revoke access from one professional and grant it to another. 

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Staying on top of your finances is vital to keep your business in good standing, but managing your money shouldn’t be a constant source of stress. A good bookkeeper or accountant, when paired with a comprehensive accounting platform like Rounded, gives you peace of mind, so you can focus on running a successful freelance operation.

Cover Photo by StellrWeb on Unsplash

Rounded is simple accounting and invoicing software made for Australian sole traders and freelancers

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