Bookkeepers and accountants:
What's the difference?
The overall accounting process includes the bookkeeping function.
Put simply, bookkeeping is the recording of financial transactions. These include sales invoices, purchase invoices, and any other receipts or payments made by organisations such as sole traders, partnerships, and companies. From these transactions the bookkeeper is able to produce a range of reports including bank reconciliations, accounts receivable, accounts payable, payroll and GST.
Bookkeepers also prepare management account reports for the client, which typically consist of the profit and loss and balance sheet. These accounts are then passed on to the accountant.
Once the bookkeeper's reports have been received, the accountant reviews them and makes any necessary entries before preparing the final tax accounts for filing with Inland Revenue.
Accountants can also give advice on tax structures and tax planning strategies. They prepare reports for banks and other lending institutions when a company applies for finance, and can advise on the best way to use profits and minimise losses.