Does my business need an accountant, bookkeeper or both?
The ATO has strict record-keeping and reporting requirements for all businesses. There are very few business owners that enjoy dealing with paperwork and tax reporting. Many misplace their paperwork or improperly file them away. It’s important to have the right professionals to help you get your paperwork and financials in order to make sure your business is compliant with the ATO’s requirements.
What do bookkeepers do?
- Processing transactions, invoices and receipts
- Handling payroll management
- Reconciliation and management of accounts and ledgers
- Managing accounts payable and receivable
- Preparing and lodging business activity statements (BAS) and net GST paid to be paid or refunded
Qualifications of a bookkeeper
The bulk of a bookkeeper’s job involves tracking transactions to prepare for a business’ lodgement of BAS. As a result, bookkeepers are often required to obtain BAS agent certification from the Tax Practitioners Board. They must have at least a Certificate IV in bookkeeping or accounting to apply to become a BAS agent.
What do accountants do?
- They can perform the same tasks that bookkeepers offer
- Structure your business
- Offering tax advice and planning
- Compiling financial statements and reports
- Completing and submitting tax returns
- Performing a business performance analysis
- Auditing and ensuring regulatory compliance
- Setting up your accounting software
Qualifications of an accountant
Accountants are more qualified than bookkeepers and have a more complicated and strategic role as well as more liability. A CPA is the highest degree of certification for a practising accountant. This is the most difficult certification to obtain for an accountant, and it will generally command a higher billing rate.
Accountants must be certified by one of three professional accounting bodies in Australia: the IPA, CPA, or ICAA. To be accredited, they must have a bachelor’s degree in accounting.
You can search any registered, suspended and deregistered tax and BAS agent and tax (financial) adviser on the Australian governments’ TPB Register.
Does an accountant or bookkeeper cost more?
Accountants are more expensive as they are more qualified and can perform more complicated tasks for your business. There is also generally more legal liability for accountants than bookkeepers.
A BAS-registered bookkeeper’s hourly rate ranges from $40 to $80 per hour. Junior accountants start at around $100 per hour and senior partners in accounting firms can demand upwards of $400 per hour.
If your business needs help with simpler tasks such as payroll management, managing accounts and lodgement of BAS, it is best to hire a bookkeeper. On the other hand, if your business needs a professional to review your business’ financials, lodge tax returns, or provide advice related to financial matters, it would make sense to hire an accountant.
Your business can also hire both a bookkeeper and an accountant; the bookkeeper can manage more basic functions such as BAS lodgement and payroll whilst the accountant can provide you advice, manage your business’ tax affairs and lodge tax returns. This is a common way of hiring for business’ to get the most out of their budget.