Bookkeeper or accountant? That is the question.

In the flurry of running a business, especially in the early days, many business owners relegate ‘doing the finances’ to an afterthought; a side mission that can be undertaken in the off hours. This is understandable, but it’s a mistake. 

It is natural to want to put all of your time and resources into revenue-driving activities: asserting your brand, perfecting your product or service and making sales. Right? Yes, kind of. But to have a business at all, you need your finances in check. You need to be compliant and have a good understanding of numbers beyond revenue: think cashflow, profit and loss, and expenses.

The hard truth is that 60% of Australian businesses fail within the first three years (Lawpath, 2024), and one of the primary reasons for such a jarring stat is poor financial management.  Getting your finances right in the beginning is so fundamental to long-term success. And you don’t have to do it alone. 

You’ve probably already been told to look to your accountant or bookkeeper for assistance, but what is the difference between them? And how do you know which is right for you, or do you need both?

We’re so glad you asked. 

Bookkeeper vs. Accountant

Generally speaking:

An accountant prepares financial statements and tax returns and scrutinises the performance of your business through a tax lens. 

A bookkeeper can assist you with budgets, manage day-to-day finances and financial processes, including invoicing, payroll, receipts, and transaction recording, and look out for sudden shifts and surprises that could trip you up or, worse, be your undoing.

In other words, if accountants take on more of a satellite view, like Google Earth, then a bookkeeper is your eye on the ground, in the thick of it, like Google Street View.

You can’t navigate your financials without both perspectives, and both accounting and bookkeeping services can be invaluable in the success of your business. 

While it’s likely necessary to engage an accountant intermittently for big-picture strategy and guidance, forming an ongoing relationship with a bookkeeper helps your business to be flexible and efficient to avoid cashflow issues.

The perks of engaging a bookkeeper

Save time, money, and headspace

The right bookkeeper doesn’t just keep your finances in check, they set an unshakeable foundation underneath your entire business so that you can concentrate on the building, the operating and the thriving. We call this newfound freedom ‘bookkeeping liberation’. 

Once you have this feeling, you’ll wonder how you lived without it. Suddenly, you’re able to direct your energies towards all that invigorating stuff that got you into business in the first place: business strategy, networking and customer relationships. No more money-sucking hours hunched over spreadsheets and invoices. Leave that to the spreadsheet and invoice-loving experts.

Audit isn’t a dirty word

Small-to-medium business owners who manage their own bookkeeping are often plagued by an unsettled gut feeling. No matter the wins of any given day or week, there’s that little voice clawing at their optimism: “if my books were audited, would my numbers line up?”

If bookkeeping isn’t your primary focus, then no matter how above board you are, innocent errors are possible. Audit issues and tax errors can lead to significant penalties, or worse, pummel a business into oblivion. Outsourced bookkeeping services take the tax money monkey off your back. 

Understand your finances

Attempting to comprehend the complexities and obligations of your finances can twist and tangle your brain into some kind of balloon animal. Before you know it, you’re one transaction or reconciliation away from it popping.

The right bookkeeping service will strip away the jargon and put complex numbers and financial concepts into simple, actionable insights.

Reduce accounting load

With a reputable bookkeeper, everything is prepared and in order for an accountant to make quick work of it. No extra charges for error corrections. No relying on that accountant to retroactively do the work of a bookkeeper. And generally speaking, bookkeepers are more cost effective than accountants. 

Improved quality of life

Business considerations aside, outsourced bookkeeping can have a positive personal impact on your mindset. During a 2023 Xero study, Executive General Manager Money at Xero, Leigh O’Neill, highlighted the impact that poor financial management is having on Australians.

“The stress of managing cash flow is having a detrimental impact on small business owners, affecting their livelihoods and happiness. That’s why it’s never been more important to plan, forecast and have a strong contingency plan in place to weather the storm and to support their positive well being”. 

For many, airtight bookkeeping and accounting support is part of that plan and peace of mind. 

All bookkeepers are not created equal

Once you’ve opted for the sweet, sweet relief of an outsourced bookkeeping service, you need to engage a company that ticks all your boxes. 

Most will, at the bare minimum, offer general bookkeeping services, like managing the day-to-day reconciliations. Others, like us at Dollars + Sense, can take care of everything (and then some!) if you need to, but still customise a services package to suit your current budget and growing business. 

This includes:

• Streamline and manage your accounts, financial records, payroll, and EOY reports
• Sort out daily reconciliations
• BAS compliance services
• Satisfy ALL ATO obligations
• Xero setup, training and maintenance
• Bookkeeping spring clean
• Consulting & advisory services (optimisation)

Want to feel empowered, compliant and strategic when it comes to your books? Get in touch. We’d love to manage your books and point you to our recommended accountants if you don’t already have someone on hand.