Do You Need a Bookkeeper, Accountant or Both? (Easy Guide for Business Owners)

Owning a business means keeping an eye on many things, such as sales, expenses, profits, and taxes. Every business owner knows that smart financial management is essential for success. However, when it comes to handling finances, many people get confused about the difference between a bookkeeper and an accountant.

Do you need one, or do you need both? What exactly do they do?

This easy guide will help you understand the roles of a bookkeeper and an accountant, how they differ, and when your business needs them.

What Is a Bookkeeper?

A bookkeeper is someone who manages your daily financial records. They keep track of all the money that goes in and out of your business. Their main goal is to make sure that your financial data is accurate and up to date.

Think of a bookkeeper as the person who builds the foundation of your business finances. Without proper bookkeeping, you won’t know your real income, expenses, or cash flow.

Bookkeepers use accounting software such as Xero, QuickBooks, or MYOB to record and organise financial data. This makes it easy to check how your business is performing at any time.

What Does a Bookkeeper Do?

A bookkeeper handles the day-to-day financial tasks that keep your business records in order. Some of their common duties include:

• Recording all financial transactions
• Sending invoices to customers
• Recording supplier bills and payments
• Managing payroll and employee payments
• Tracking business expenses
• Reconciling bank statements
• Keeping receipts and financial documents organised

In short, a bookkeeper focuses on recording and organising your financial information accurately.

What Is an Accountant?

An accountant takes your financial data and helps you understand what it means. They look at the bigger picture and provide financial advice to help you make better decisions.

While bookkeepers record transactions, accountants analyse them. They can tell you whether your business is making a profit, how to reduce taxes, or where you can save money.

Accountants also make sure your business follows all tax laws and financial regulations. They prepare reports that help you see your financial position clearly.

What Does an Accountant Do?

An accountant’s job goes beyond recording numbers. They help you understand and improve your business finances. Here are some common tasks they handle:

• Preparing and lodging tax returns
• Creating financial reports and statements
• Helping with business budgeting and planning
• Providing advice on cash flow and profit improvement
• Ensuring your business meets ATO and legal requirements
• Helping you make financial decisions
• Advising on investments and business structure
• Analysing financial data for growth opportunities

So, accountants are not just about numbers; they focus on strategy and financial planning.

Bookkeeper vs Accountant: What’s the Difference?

While their jobs sound similar, there are key differences between bookkeepers and accountants.

• Bookkeepers focus on recording financial data.
• Accountants focus on analysing and interpreting that data.

Here’s a simple way to remember it:

• The bookkeeper keeps the records. The accountant uses those records to give you financial insights and advice.
• Bookkeepers handle the daily financial activities, while accountants step in to help you make important business decisions based on those records.

Key Differences Between a Bookkeeper and an Accountant:

Why Every Business Needs Good Bookkeeping

Even a small business needs accurate financial records. Without bookkeeping, it’s easy to lose track of your expenses, forget invoices, or miscalculate your income.

Here are a few reasons why bookkeeping is so important:

• It helps you understand your cash flow.
• You always know how much money your business makes or owes.
• It makes tax time easier and stress-free.
• It helps you avoid financial mistakes.
• You can make better business decisions with real data.

Bookkeeping keeps your business organised and ready for growth.

Why Accountants Are Important for Business Growth

While bookkeepers help you manage your financial records, accountants help you grow your business. They look beyond numbers and guide you on financial strategy.

An accountant can help you understand your financial statements, identify risks, and plan for long-term success. They also make sure you meet your tax obligations while saving as much as possible legally.

If you want your business to grow, an accountant can become your best financial partner.

Do Small Businesses Need Both?

Yes — in most cases, having both a bookkeeper and an accountant is the best choice.

Here’s why:

Your bookkeeper keeps your records clean and accurate every day. Then your accountant uses that data to prepare reports, do taxes, and guide you in making smart financial moves.

If your business is small, you might only need a bookkeeper at first. But as your business grows, you’ll need an accountant to handle complex financial tasks.

When Do You Need a Bookkeeper?

You should hire a bookkeeper when:

• You spend too much time doing financial paperwork.
• Your invoices and bills are getting hard to manage.
• You don’t know your current cash flow.
• You need accurate records for tax time.
• You use accounting software but need help maintaining it.

Having a bookkeeper saves time and ensures your records are always up to date.

When Do You Need an Accountant?

You should hire an accountant when:

• You’re starting a new business and need advice on structure.
• You need help with tax planning and lodgement.
• You want to reduce your tax legally.
• You’re planning to expand or hire more staff.
• You want a professional opinion on business performance.
• You need to apply for a loan or attract investors.

An accountant helps you make smart decisions and avoid costly mistakes.

Can One Person Do Both Jobs?

Sometimes, especially in small businesses, one person might do both bookkeeping and accounting. This can work if the person is qualified and experienced in both areas.

However, it’s often better to separate the two roles. Bookkeeping is a detailed, daily task that needs constant attention. Accounting involves higher-level analysis and planning.

Having two professionals ensures that both jobs get done well.

The Benefits of Having Both

When you have both a bookkeeper and an accountant working together, your business enjoys many benefits. You get complete financial clarity and control.

Your bookkeeper provides accurate data, and your accountant turns that data into valuable insights. This teamwork helps your business stay organised, compliant, and ready to grow.

You also avoid surprises during tax season because your records are always up to date and correct.

How Bookkeepers and Accountants Work Together

Here’s how the process usually works in a healthy business setup:

• The bookkeeper records all the daily transactions and keeps the data organised.
• The accountant reviews that data, creates reports, and provides insights or advice.
• Both professionals work together to prepare taxes, budgets, and financial forecasts.
• Their teamwork ensures that your business always runs smoothly and meets financial goals.

The Cost of Hiring a Bookkeeper or Accountant

Many business owners worry about cost. But hiring these professionals can save money in the long run.

A bookkeeper charges based on hours or monthly packages. The price often depends on the size of your business and the number of transactions.

An accountant usually charges more because their work involves tax, financial strategy, and compliance. However, a good accountant can help you save much more than you spend by reducing taxes and improving profits.

Think of them as an investment, not an expense.

Signs You Need Professional Help

Sometimes it’s hard to know when you need a bookkeeper or accountant. Watch out for these signs:

• You’re falling behind on your bookkeeping.
• You’re unsure how much profit you’re making.
• Tax time feels stressful or confusing.
• You don’t understand your financial reports.
• Your cash flow is unpredictable.
• You’re missing payments or invoices.

If you experience any of these, it’s time to bring in help.

Using Accounting Software with Bookkeepers and Accountants

Modern businesses use software like Xero, MYOB, or QuickBooks to manage their finances. These tools make data entry, preparing financial statements, and filing tax returns easier, faster, and more accurate.

Bookkeepers use the software for accurately recording daily transactions, tracking invoices, and staying on top of accounts payable and accounts receivable. Tax accountants and accountants use the same data to perform high-level analysis, prepare balance sheets, assess financial health, and provide insights for important business decisions.

With cloud accounting, you can access your financial information anytime from your phone or computer. It helps you stay on top of your finances, reduces mistakes, and makes collaboration between you, your bookkeeper, and your accountant cost-effective and seamless.

Can You Do It Yourself?

Many small business owners try to handle bookkeeping and accounting themselves, especially at the start. This is fine if your business is simple and you have time to learn.

However, as your business grows, tasks become more complex. You’ll have more transactions, stricter tax rules, and more reports to manage. Trying to do it yourself can lead to errors, missed deadlines, and an unclear picture of your financial health.

If you want to focus on running your business instead of handling numbers, hiring a professional bookkeeping or accounting service provider, like a tax accountant, is a smart move. They ensure accurate recording of all financial activities and help you make informed business decisions.

Financial Errors Business Owners Often Make

Without professional help, many small business owners make mistakes that can hurt their business. Common errors include:

• Mixing personal and business expenses
• Forgetting to record small transactions
• Missing tax deadlines or filing tax returns late
• Not keeping receipts or invoices
• Ignoring cash flow problems
• Not reconciling bank accounts regularly

A skilled bookkeeper and accountant help you avoid these mistakes, prepare financial statements correctly, and maintain a clear view of your financial health—saving time and money.

Choosing the Right Bookkeeper or Accountant

When hiring, look for professionals who understand your industry and have the right qualifications.

• For bookkeepers, check if they are registered BAS agents or certified bookkeepers.
• For accountants, ensure they are registered with CPA Australia or IPA and can act as a tax accountant.

Choose someone who communicates clearly, helps you understand your finances, and teaches you how to read your reports. With the right team, you can stay on top of your finances, make smart business decisions, and cost-effectively manage your financial activities.

Building a Strong Financial Team

As your business grows, having a strong financial team becomes important. Your bookkeeper, accountant, and even financial advisor can work together to support your goals.

This team can help you with budgeting, forecasting, cash flow management, and tax planning. With the right people handling your finances, you can focus on growing your business confidently.

The Role of Technology in Modern Accounting

Technology has changed the way bookkeeping and accounting work. With automation and cloud-based systems, you don’t need to keep piles of paper anymore.

Transactions can be recorded automatically. Reports can be generated with a few clicks. You can even share your data securely with your accountant online.

This makes it easier to stay updated, even if you work remotely or travel often.

Why You Shouldn’t Wait to Get Help

Many business owners wait too long before hiring a bookkeeper or accountant. They think they can handle it later, but that often leads to bigger problems. Late record-keeping can cause confusion, stress, and even tax penalties.

Hiring professionals early ensures your business stays on track from day one. With a qualified tax accountant or bookkeeper, you can manage accounts receivable and accounts payable, handle the day-to-day financial activities, and generate accurate business activity statements (BAS) in real time. Their attention to detail ensures compliance with the Tax Practitioners Board and other regulatory requirements.

The sooner you hire help, the better your financial control will be. Accountants manage your taxes and financial data efficiently, allowing you to focus on growing your business with confidence.

Bookkeeping and Accounting for a Startup

Starting a new business is exciting, but managing finances can be tricky. Bookkeeping and accounting services are essential to see if your business idea works and to keep your records organised and compliant.

We help you manage your expenses, plan your taxes, and set up your business correctly from the start. Our team handles accounts receivable, accounts payable, business activity statements, and other key financial tasks with attention to detail, ensuring real-time accuracy. With our support, you can focus on growing your business while avoiding mistakes. Get expert assistance from SMG Accounting Services.

The Bottom Line: Do You Need Both?

Yes — in most cases, you do.

A bookkeeper keeps your daily records clean and accurate, handling the day-to-day financial activities. An accountant uses that information to plan, analyse, and guide your financial growth.

Together, they form the perfect team for your business success. You don’t need to choose one over the other; you just need to understand when and how to use both.

FAQs

1.  Do I need a bookkeeper if I have an accountant?

It depends on your business size. For small businesses, an accountant or tax accountant might handle both tasks. But as your business grows, a bookkeeper helps manage accounts receivable, accounts payable, and daily transactions, which makes the accountant’s job easier.

2. Does a bookkeeper need to be an accountant?

No. Bookkeepers and accountants have different roles. Bookkeepers focus on recording transactions and keeping records, while accountants analyse data, prepare business activity statements, and provide financial advice.

3. Which is better – accounting or bookkeeping?

Neither is “better.” Both are important. Bookkeeping ensures your financial records are accurate, while accounting helps you make decisions and plan for the future. Most businesses benefit from having both to maintain compliance and manage financial activities effectively.

4. What can an accountant do that a bookkeeper cannot?

An accountant can prepare tax returns, give financial advice, analyse profit and loss, help with business planning, and represent you to tax authorities. Bookkeepers focus on recording and organising accounts payable, accounts receivable, and daily transactions.

5. Do I need both a bookkeeper and an accountant?

Yes. A bookkeeper keeps your daily financial records accurate, while an accountant analyses the numbers, provides advice, and helps with taxes. Together, they ensure all financial activities are handled with attention to detail and real-time accuracy, keeping your business compliant and efficient.

Final Thoughts

Managing a business without help with money can be hard. A good bookkeeper and accountant make it easier and less stressful.

Your bookkeeper takes care of the numbers every day. Your accountant turns those numbers into insights and strategies. Together, they help you grow, stay compliant, and reach your goals.
So, if you’ve been wondering, “Do I need a bookkeeper, accountant, or both?” the simple answer is both, especially if you want your business to thrive.

Let SMG Accounting Services support you in achieving business success.