There are similarities and differences between a bookkeeper and an accountant. They both work with financial data; they’re both essential for managing a successful business. Yet the roles and duties of a bookkeeper and accountant rarely overlap.

If you’re like many business owners, you may not be exactly sure of the differences between a bookkeeper and accountant – and whether you should hire one, or both.

For tradies and contractors working in the construction industry it has become even more important now to keep their books in order throughout the year. You need to be able to report maximum revenue and accurate asset to liability ratios to the Queensland Building and Construction Commission (QBCC). If the financial situation changes through the year, the QBCC wants to know and you need to submit a Self-Declaration form.

This has become a huge compliance issue since the QBCC has introduced new Minimum Financial Requirements (MFR) lat last year. The question of who to talk to on a particular financial reporting issue (accountant or bookkeeper) can be confusing for tradies. However, if you don’t comply with the new MFR, your QBCC licence could be suspended or cancelled.

An established, growth-focused business will employe the services of both an accountant and bookkeeper. The two professionals work in tandem, to ensure business financials are up to date and accurate, and the financial health of the company is carefully monitored.

This is particularly important in relation to the critical figures required for QBCC compliance reporting, ie that maximum revenue is not exceeded and the asset ratio is meeting the compliance requirement.

Ideally you’ll have a bookkeeper who is across the QBCC reporting requirements and your accountant is on the same page as your bookkeeper. The average tax accountant may not be the best choice for tradies who want to keep their QBCC licence, as this is becoming a specialist area in the accounting profession.

If you’re still in the early days of your business, you might choose to do the bookkeeping yourself, or hire a bookkeeper for a couple of hours a month until it makes sense to bring someone on full time. If you are at this stage in your business, you’ll need to put bookkeeping on top of your list of priorities, because if you can’t monitor the maximum revenue threshold yourself at any point in time, even your accountant will have difficulty working out your asset and liability ratios.

A look at bookkeeping for small business

The primary role of a bookkeeper is to handle a company’s day to day financial management. A bookkeeper will take care of the small but important details that are essential for providing an accurate picture of where a business stands at any given moment.

In addition to a bookkeeper’s main job – making sure every financial transaction is accurately recorded in the general ledger – they may also lend a hand with other key tasks like invoicing, paying suppliers and vendors, and processing payroll.

Ideally a company’s books are updated at the end of each business day, so you always have a true account of your sales, expenses, and the bottom line. If your business is still in its early stages, however – without a lot of financial activity or the funds to hire a bookkeeper – you should aim to reconcile your own accounts at least once a week.

Why you need an accountant

The simplest way to describe what a bookkeeper does as opposed to what an accountant does is like this: your bookkeeper makes sure all your financial transactions are recorded properly and your BAS is lodged in time. Your accountant is in the business of making sense of the figures and reports the bookkeeper produces for you in the broader context of your business and can assist with minimising your tax. Of course it’s not quite that simple.

An accountant’s primary role is to help companies make sense of their numbers for the purpose of strategic planning – analyzing, summarizing, interpreting, and reporting on financial data in order to provide “big picture” business advice.

As a small business owner, you’ll want to work with an accountant from very early days to help with budgeting, forecasting, and decision making – as well as for strategic tax advice, and identifying opportunities to reduce costs and maximize profitability.

Many business owners think they only need to talk to their accountant once a year, at tax time. But in order to be able to truly gauge the health of your business – and make the most of your accountant’s expertise – it’s recommended you check in at least once a month.

Your monthly meeting is a chance to review key reports, like your profit and loss statement, discuss opportunities or areas of concern, and get timely advice to help meet the goals you’ve set out in your annual business plan.

Final thoughts

As your business grows, it’s essential to have trusted financial professionals managing your books and providing strategic financial advice.

After all, the busier you get, the more complex financial management becomes – and the less time you’ll have to maintain your books and try to make sense of all the data.

A trustworthy bookkeeper’s services are essential for a thriving business, and an accountant can do so much more than handle your taxes. Think of your accountant as a trusted business partner – someone whose services you rely on year round for advice on how to increase profitability as you take steps to achieve your business goals.

Tradie Bookkeeping Solutions are bookkeepers who understand the QBCC requirements, but also the challenges tradies and contractors are facing to meet them. We work with accountants who are specialists in QBCC reporting. Our regular reviews and quarterly QBCC compliance check can help tradies have peace of mind, and save a little before getting their accountant involved.

Contact us for a FREE QBCC Compliance Check to find out if your business is meeting the requirements.