How your bookkeeper and accountant can work together
Businesses will handle their own bookkeeping or hire a bookkeeper to look after the day to day financial needs of the business while retaining an accountant to review their books annually as part of overall tax preparation and strategic planning. Here are five ways that bookkeepers and accountants can work together and look after the financial health of your company.
Setting up the bookkeeping system
The accountant sets up the bookkeeping system that the bookkeeper will adhere to. The accountant must develop a system that is beneficial to the business, by capturing the financial information in a useful manner to able to run reports and manipulate data but should also be easy to use and not overly cumbersome for the bookkeeper.
Keeping accurate and up to date records
Accountants can fix errors in bookkeeping, but often their hourly rates are so high that it is not cost effective for them to pick up the pieces. For that reason, bookkeepers should frequently consult with accountants to make sure that everything is set up properly, records are up to date and accurately entered into the system.
Double checking BAS and accounts
A bookkeeper will liaise with the business owner to receive all the information necessary and enter it into the bookkeeping system without the costly expense of an accountant entering these details. All your accountant needs to do is ensure that the details for the BAS and accounts match before the tax return is done and double check the bookkeeper’s work.
Simplifying the accounts
The accountant will use the information entered by the bookkeeper to simplify the accounts in order to better analyse cash flows. For example, the bookkeeper may have recorded clients funds into many accounts, the accountant will see this and put all the funds into one account and advise the bookkeeper accordingly.
Strategic planning
A good bookkeeper will keep the books up to date on a day-to-day, week-to-week, and month-to-month basis but an accountant needs to have a bigger picture mentality. Armed with the data the bookkeeper provides, an accountant can use information to suggest improvements and strategies to implement in terms of cash flow analysis, setting benchmarks, budgeting and forecasting for the business.
A good bookkeeper will keep the accounts in order so an accountant will only need to check over the figures to make sure they are correct saving you money in exorbitant accounting fees. Hiring a bookkeeper is a cost effective way to manage your day-to-day accounts without having to pay the excessive fees of an accountant who can focus on tax compliance, auditing and planning, freeing your time to run your business.
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