There are many different roles in the world of finance. As a small business owner the most common roles you will come across are bookkeepers, accountants and tax agents. Often these terms will be used interchangeably depending on the services you receive, however, they do not refer to the same type of service. Each role provides a unique service to your business which can add serious value.
To help you better understand the differences between the three, so you can find the right service for your business, we will give a rundown as to what each role does.
Accountants typically assist with preparing financial statements that reflect your business’ performance. They are also generally responsible for the collection, recording, analysis, and visualisation of a business’ financial operations. Depending on the scale of your business, an accountant may also take on additional or fewer responsibilities.
Simply put, an accountant is someone who interprets financial information to assist with the greater decision-making processes within a business. For some accountants this may start and end with providing data about your business’ financial position once a year. Other accountants will take a more active role, keeping you updated on your financial situation so you can make informed business decisions on real-time data. They may also provide business advise based on their experience working with clients across your industry.
Bookkeepers maintain your business’ accounting records. They help small businesses in recording financial transactions in account books or in software like Xero. A bookkeeper can be hired to work within a business, however most small business’ outsource their bookkeeping to a professional service.
Often the key responsibilities of a bookkeeper include the following:
- Keeping financial records, and maintaining and balancing accounts
- Monitoring cash flow and lines of credit
- Producing financial statements, budget, and expenditure reports
- Preparing invoices, purchase orders and bank deposits
- Reconciling accounts against monthly bank statements
- Verifying recorded transactions and reporting irregularities to you
Tax Agents are specialised professionals who have studied tax and law, allowing them to be registered by the TPB. With this registration they are able to provide tax services to the public. Often an accountant will also be a tax agent, however this is not always the case. Some roles of a tax agent will include:
- Advising about liabilities, obligations or entitlements of your business under taxation law
- Representing your business in any dealings with the Commissioner of Taxation in relation to a taxation law
Accountants, bookkeepers, and tax agents each perform an individual and important role for your business. They have the potential to offer real value to your business as long as you pick the right person or firm. Link Strategies helps small businesses with their bookkeeping. Give us a call and see the difference we can make in your business.