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Do You Need a Bookkeeper or an Accountant? Or Someone Else?

There are many finance professionals — who does your business need?

find a good local bookkeeper
Does your business need a bookkeeper, accountant or perhaps just a BAS agent – or a little bit of everyone?

WE’VE MENTIONED PREVIOUSLY THAT finding a bookkeeper, when you may not know much about bookkeeping, can be a difficult task.

In fact, a lot of new business owners assume their accountant will take care of everything for them, which may be costly if their accountant has to perform a year’s worth of bookkeeping in order to file the business’s tax return. But bookkeepers and accountants can work harmoniously in your business.

As a general rule, every business needs at least two finance professionals working on their business accounts, but which two professionals you’ll need to hire depends on your business needs. If you’re not sure who you need to hire for your business, here’s a cheat sheet to help you out.

Bookkeepers (not registered with the TPB)

An independent bookkeeper not employed by an accountant and not registered with the Tax Practitioner’s Board (TPB) may only perform basic bookkeeping services, such as the entering of receipts, coding financial transactions, generating invoices and, possibly, some accounts receivable work. If you hire this type of bookkeeper, you’ll still need an accountant.

BAS agents

BAS agents must, by law, register with the Tax Practitioner’s Board (TPB), which certifies that they are qualified and have completed the necessary continuing education requirements to perform the tasks of a BAS agent, which involves carrying out most of the bookkeeping tasks mentioned above, in addition to preparing and lodging business activity statements on a business’s behalf.

If your business is registered for GST, you will need to file regular activity statements. If you hire a BAS agent, you’ll also need an accountant. In some instances, you may find a BAS agent who’s also a registered tax agent and vice versa, who may be able to take care of all your taxation needs.

Tax agents

Although tax agents, like BAS agents, must also register with the Tax Practitioner’s Board (TPB), a tax agent is focused on income tax — how much income you have to declare, how much you can claim back, etc.

This is distinct from a BAS agent who is concerned with the day-to-day financial tasks of your business (bookkeeping and BAS lodgements). That said, some tax agents will also perform some the basic bookkeeping tasks on a regular basis, though they primarily specialise in lodging tax returns.

If you’re not registered for GST, and your tax agent will also perform regular bookkeeping tasks (or you can do it yourself), you may not need to hire an accountant. In some instances, you may find a tax agent who’s also a registered BAS agent and vice versa, who may be able to take care of all your taxation needs.

Accountants

An accountant is mostly concerned with planning and strategy. Unlike bookkeepers and BAS or tax agents, an accountant will assess and advise you on what actions you should take to maximise your income. Great accountants will get involved with planning the direction of your business and ensure it’s been structured properly and that you’re meeting any additional tax obligations.

They’ll also help you to make strategic purchases for equipment and machinery, and work with your BAS agent or bookkeeper to ensure these decisions are reflected in your daily financial records. An accountant is also able to prepare and lodge tax returns on your behalf.

How much should I pay a bookkeeper?

Check out the National Bookkeeping Directory, which features the details of bookkeepers, capable of doing data entry and clerical tasks, through to high-level accounting work as undertaken by BAS agents, accountants and CFOs.

You can also see the National Bookkeeping rates page to find out what level bookkeeper your business needs.


cashflow reports in xero and excel

Our Xero online training courses include EVERYTHING for ONE LOW PRICE. Furthermore, if you select our Lifetime Membership option, you’ll have LIFETIME access to our ongoing course updates. All EzyLearn courses are accredited by the Institute of Certified Bookkeepers (ICB) and can be counted towards Continuing Professional Development (CPD) points. Find out more about our Xero online training courses. 


 

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What do bookkeepers do during the first consultation?

Interviewing a potential bookkeeper

become an independent contract and start a bookkeeping businessIF YOU’RE LOOKING TO start your own bookkeeping business, or looking to hire a bookkeeper to help you with your bookkeeping, you might be wondering, how does a bookkeeper assess a business’s bookkeeping needs?

As it’s a legal requirement for every business to file a tax return and, sometimes, a quarterly business activity statement (BAS), it’s necessary, then, to keep accurate records of the business’s income and expenditure.

The process of keeping this up-to-date and, if the person is also registered to do so, complete any activity statements, is the role of a bookkeeper.

A bookkeeper, unless they’re just providing a business with general data entry services – reconciling accounts, paying invoices, chasing late payers – should be registered with the Tax Practitioners Board (TPB) as either a tax agent, BAS agent or both. If they’re not, and they don’t hold a bookkeeping or accounting certification, either, then they’re only qualified to charge for the general data entry services.

But, assuming they are TPB registered and qualified to prepare and lodge tax returns and activity statements, then there are a number of things you can typically expect of a  bookkeeper during the first consultation with a prospective client.

Free consultation with bookkeeper: what to expect

1. Accounting data file health check

If a business already has an accounting package, a bookkeeper will perform what’s called a ‘health check’. This is a basic check to ensure the accounts have been set up properly in MYOB, Xero, Quickbooks or whatever accounting software the business happens to use – though it’s generally only these well-known packages that a bookkeeper will work with. If a business is using a lesser-known package, like Zoho books, for instance, they may not be able to work with it.

2. Recommend an accounting package

If a business doesn’t already have any accounting software – or maybe they do, but it’s not a package the bookkeeper is familiar with – they may recommend certain software for the business to use, typically MYOB, Xero or Quickbooks.

Generally, the bookkeeper will recommend that someone in the business is trained in whatever software they recommend, as there are some functions — invoicing for example, and even sometimes bank reconciliations — that the business will still need to take care of themselves to reduce their costs, unless the business wants to pay the bookkeeper to do this. Some bookkeepers provide this training so there’s a uniform approach to managing a business’s books.

3. Review of current systems/procedures

The bookkeeper may make recommendations to your general account keeping procedures or systems to improve or streamline them. This could involve, for instance, a recommendation to open a business bank account or using a certain credit card for payments; invoicing clients on a particular day of the week or as jobs are completed to improve cash flow, et cetera.

4. Draft a tentative action plan

In that plan, the bookkeeper will include a confidentiality agreement or letter of engagement which both parties need to sign; they’ll also make recommendations as to how the business should provide information, such as source documents which will differ based on the working arrangement. For instance, virtual bookkeepers may suggest uploading documents to Dropbox, while a local bookkeeper may go to the business’s premises or request the business to come to theirs.

The bookkeeper will also make suggestions as to how regularly their services would be required — once a week, month, and so on.

5. Answer any questions or queries

If the bookkeeper is registered tax agent, they should be able to tell you what sorts of expenses count as a tax deduction. Many people mistakenly believe that only an accountant can provide this sort of advice, but that isn’t true.

An accountant can only lodge and give tax advice if they’re a registered tax agent, and the same goes for a bookkeeper. Thus, should be well versed in Australian tax law.

Why a free initial bookkeeping consultation?

Typically this initial consultation is free and should take an hour or less and it also gives the bookkeeper an opportunity to see if you are the right fit for the client base they would like. Generally the initial consultation occurs in person, even if the bookkeeper will work from home or remotely once their services have been engaged.

In the case of virtual bookkeepers working in a different city or state to their clients, it’s now possible to carry out the initial consultation using Skype, Google Hangouts or any other video conferencing apps – or even just over the telephone.

If the bookkeeper finds that your circumstances are not ideal for their skills or time capacity they should have a network of other bookkeepers/accountants who they can refer to you.

Start a bookkeeping business today

Start a bookkeeping business not a franchiseIf you’d like to start a bookkeeping business, EzyLearn has recently partnered with National Bookkeeping, which is looking for licensees.

As a licensee with National Bookkeeping, you’ll have access to EzyLearn training courses (which also means the license fee is one hundred percent tax deductible. Visit the National Bookkeeping website today and register your interest online.