What’s the Difference Between Bookkeepers, Accountants, and Tax Agents?

There are many different jobs in the field of finance. There are many other career paths you can follow within the sector, depending on your area of competence and interest. Some examples include becoming an auditor, an analyst, a banker, or a financial officer. It is crucial to have an understanding of a few of the key positions within the financial sector, whether you are an individual interested in exploring a role in finance or a small business owner who may require some financial assistance.

Bookkeepers, accountants, and people who prepare tax returns are without a doubt going to be the roles that you come across the most commonly when looking for work in this industry. Despite the fact that it is usual practise to use these terms interchangeably, they do in fact refer to separate ideas.

Shoebox gives a synopsis of each function in order to provide you with a more comprehensive knowledge of the parallels and divergences that exist between these various professional services. This tutorial will walk you through what it could be like to work as a bookkeeper, accountant, or tax agent, as well as some of the qualifications you'll need to have in order to enter this field. Continue reading in order to acquire further information on these important services and professional roles.

Accountants

It is common practise for companies to enlist the assistance of accountants in order to aid in the creation of financial statements that detail the performance of the company. The majority of the time, it is their responsibility to assemble, document, investigate, and display in graphical form the financial activities of a corporation. In addition, the size of the company that the accountant works for can either increase or decrease the scope of the obligations that they are responsible for.

For this purpose, for instance, smaller businesses might need assistance with data collection and report generation. Typically, businesses seek the assistance of an accountant through outsourcing. However, larger businesses might hire an accountant full-time to act as a financial adviser or interpreter. When working for larger firms, accountants may also be required to give presentations to various stakeholders from the outside. To put it in terms that the average person can understand, an accountant is essentially someone who evaluates financial information in order to aid with the more practical decision-making processes that occur within businesses.

The following are some of the particular responsibilities and tasks that are expected to be carried out by accountants, as stated by Seek.

• We are looking into the individual's or organization's revenue as well as the expenses that they incurred.
• Developing and sticking to spending plans
• Putting together the financial statements
• Developing accounting policies through collaboration with key stakeholders and conformity to statutory mandates
• We are now working on generating reports that detail how well our company complies with various regulatory standards.
• Auditing, investigating financial matters, and managing insolvency are all tasks that need to be completed.
• Offering guidance on corporate strategies, organisational structures, and financial management systems
• Creating financial entities such as bank accounts, funds, and trusts
• Controlling the flow of funds and managing projects related to investments.

It was beneficial to acquire a better grasp of the work by using the Job Outlook tool that was supplied by the Australian government. This tool was an excellent resource for statistics related to the profession, and it was helpful in doing so. The average annual remuneration for accounting positions in Australia is over $70,000, which means that if you work as an accountant there, you can anticipate receiving a yearly compensation that is higher than that amount. In order to become a certified public accountant, you are required to have earned a bachelor's degree from an accredited college or university. A bachelor's degree in accounting or a bachelor's degree in business with an accounting specialisation are both acceptable qualifications. Following this, in order to work as an accountant in Australia, you will need to join one of the three professional bodies that are responsible for accounting regulation there. Chartered Accountants of Australia (ICAA), the Institute of Public Accountants (IPA), and Certified Public Accountants Australia (CPA Australia) are these organisations (CPA).

In order to operate in the accounting sector, you do not need to possess these qualifications; nonetheless, possessing them is required in order to become an accountant. As long as you are certified by one of the organisations described above, you will be able to put some essential accounting skills to use, such as creating financial reports that can be evaluated by third parties. If you are able to do this, you will be able to apply your accounting knowledge. Let's pretend, for the sake of argument, that you don't intend to pursue further education and acquire a bachelor's degree. If this is the case, you can improve your accounting knowledge by enrolling in additional programmes, such as those that lead to a certificate IV in Accounting or a diploma in Accounting. In either case, you will be able to demonstrate your proficiency in accounting. Both of these things can help you increase the likelihood of being accepted into the IPA.

Advancing Your Degree

Have you worked in accounting for a while, but you're ready to take the next step in your career? You may be able to gain a competitive advantage by earning a Certified Public Accountant or Certified Public Accountant credential. The question that needs to be answered now is, just what new features are they, and how can you make use of them?

• CA: This refers to people who have a chartered accounting degree. You will be better prepared to manage more sophisticated accounting operations, such as auditing and technical tax concerns, if you obtain this qualification. Additionally, it will move you closer to working for one of the Big Four accounting firms.
• CPA: On the other side, becoming a Certified Practicing Accountant allows one to acquire a wider range of skills. This certificate will equip you with extra accounting abilities like as costing, production, marketing, and planning, which will make it easier for you to enter into a variety of alternative industries.

Essential Abilities for a Career as an Accountant

• Critically analysing
• Mathematics
• Reading and understanding
• Communication
• Computer expertise
• Personality traits

Bookkeepers

Bookkeepers are the personnel who are responsible for maintaining the orderliness of the financial records of an organisation. They offer support to small firms as they go through the process of recording financial transactions in account books or through the use of accounting software for computerised record keeping. Bookkeepers can be hired to work internally within a company or they can be contracted out to work for another organisation. Both scenarios are viable options. They have a deep acquaintance with the businesses that they have as clients as a result of the fact that they are responsible for handling the minute particulars of a company's entering and departing transactions.

The following are some of the most important roles and responsibilities of a bookkeeper, as outlined by Job Outlook:

• Keeping financial records, as well as monitoring accounts and ensuring that they are balanced, using both manual and computerised accounting systems to perform these functions
• Always keep a tight eye on the amount of cash and credit that you have available.
• Making use of account books, ledgers, and various other accounting software programmes in order to carry out the activities of creating and producing financial statements, budget and expenditure reports, and analyses
• Putting the bank deposits, the invoices, and the purchase orders all together in one place
• When accounts are being reconciled, a comparison is made between those accounts and the monthly bank statements.
• Carrying out inspections on previously recorded transactions and reporting any inconsistencies to management
• In order to disclose the tax entitlements and duties of your firm, such as the total amount of goods and services tax paid and collected, you might be required to fill out some documentation. If this is the case, you should be prepared to do so.

Bookkeepers in Australia can expect an annual salary of more than $60,000 on average. Bookkeeping is a position that requires a qualifying process that is somewhat less thorough than accounting's. A certificate IV in bookkeeping or accounting is required in order to work in the accounting field as a bookkeeper. In order to carry out activities related to tax preparation, you are required to be registered with the Tax Practitioners Board as a BAS agent (TPB).

Essentials for a Bookkeeper

• Observation of details
• Critically analysing
• Mathematics
• Reading and understanding
• Communication
• Computer expertise
• Building interpersonal and relational abilities
• Organising abilities

Tax Agents

At long last, there are agents who deal with tax matters. There are many subfields in which accountants might specialise; nevertheless, taxation accounting is the area in which tax agents concentrate their knowledge and experience. They have gotten instruction in tax and legal matters from the TPB in order to achieve this objective and become more knowledgeable. Having this registration permits them to offer their tax services to the general public so long as they keep their licence up to date by renewing it every three years as is necessary. In other words, as long as they retain their licence in good standing.

As outlined by the TPB, the following are some instances of circumstances in which the duties and responsibilities of a registered tax agent are relevant.

• calculating (that is, computing) the obligations, rights, or liabilities of entities (that is, your clients) under a tax law or giving them guidance on such issues
• representing entities in their interactions with the Commissioner of Taxation (also known as the Commissioner) regarding a taxation law
• if it is probable that the entity will depend on the service to satisfy debts or obligations, claim benefits under tax laws, or fulfil other commitments.

The usual annual salary of a taxation accountant in Australia is typically more than $70,000, with the average salary being significantly more. Because taxation is a more specialised component of accounting, it calls for a higher degree of education, competence, and experience from those who work in the field.

For instance, you are required to have a continuous awareness of the most recent tax legislation. This is one of the reasons why you are required to periodically renew your licence. The skills and information that are necessary to operate as a tax agent are, to a greater or lesser extent, comparable to those that are required to work as accountants and bookkeepers.

In Summary

Accounting is primarily concerned with translating and synthesising the results of businesses into information that can be used by decision makers. This is the core focus of accounting. Accountants are able to prepare financial statements, which can help owners or directors of a company make informed decisions about the business. For a person to be effective in their performance of this job, they will need to possess a very specific set of skills. The majority of the time, accountants will conduct their examination of the data making use of the information that was obtained from accounting.

The obligations of documenting, analysing, and identifying the transactions that occur in a business are the primary tasks of bookkeeping. It is not possible to base choices on the results of bookkeeping all of the time; in certain circumstances, the process of financial planning requires the support of accountants.

The work of taxation agents is singular in that it entails the provision of tax services. This area of accounting is extremely specialised and requires a skill set that is even more narrowly concentrated than that of a conventional accounting department in order to be successful. For tax agents to be able to assist businesses in an efficient manner, they need to have a comprehensive and up-to-date grasp of the various tax laws and regulations that are in existence.

If you are good at paying attention to detail, have a natural talent for mathematics, and are interested in entering one of the professions listed above, then you really ought to give it an attempt. Working in the financial industry can be challenging at times, but it also has the potential to be extremely fulfilling when done well. In addition to this, it may present you with opportunities for professional development as you progress down the route of your career, which is something that will be of great use to you. In addition to this, it is an excellent stable employment, which is a feature that is becoming a lot less common in jobs these days.

Shoebox Books is a one-stop shop for small businesses who require any one of the aforementioned professional services because it offers all three of these services under one roof. In order to provide your company with the specialised financial services it requires, Shoebox Books recruits professional bookkeepers, accountants, and tax agents from all around Australia and places them to work for the company.

Do I need an accountant or a bookkeeper?

The phrases "accountant" and "bookkeeper" are sometimes used synonymously with one another. There are certain similarities between the jobs of accountants and bookkeepers, but there are also important distinctions between the two. If you are the owner of a small business and are attempting to determine what kind of support you require when it comes to the maintenance of financial records, the following suggestions may aid you in making the best choice possible.

What do accountants and bookkeepers do?

Bookkeepers are capable of handling a variety of tasks, including payroll, data entry, petty cash, and the reconciliation of bank accounts, in addition to accounts payable and accounts receivable.

If your bookkeeper is also a paid employee, they have the ability to create and submit business activity statements (commonly known as GST statements or BAS) to the Australian Tax Office on behalf of your company.

If, on the other hand, you outsource these responsibilities to your bookkeeper, who is also a registered tax agent or BAS agent, your bookkeeper may charge you a fee for performing these services. (In principle, they are able to complete the task at no charge; however, why would they?)

Bookkeepers can also assist you with the establishment of rules and processes to guarantee that all of your financial data is gathered and stored in the appropriate manner. When it comes time to file your taxes, you won't have to rummage through the third shelf or a shoebox down at the bottom of the wardrobe to find your receipts and invoices because you'll have them organised like this.

Accountants can also prepare your tax returns and manage monthly financial responsibilities. On the other hand, in contrast to bookkeepers, they are able to provide advice on intricate tax matters.

The majority of accountants also offer strategic advice to business owners, and some of them can also offer advice on personal finances if they have the necessary licences to practise financial planning.

The primary distinction between the two is that while bookkeepers can carry out day-to-day chores for your company, you should consult an accountant if you want more strategic guidance to assist you in expanding your company while minimising your tax liability.

Which one does my business need?

The current state of your company as well as the goals you have set for it will determine whether you require the services of a bookkeeper or an accountant.

For instance, if you own a company that has relatively uncomplicated financial operations, then possibly a bookkeeper will be sufficient for your requirements.

The volume of work that your company generates should guide your decision on whether to engage a bookkeeper on a full-time basis or simply use their services on an as-needed basis. Do you have a large number of invoices to send out, a large number of bills to receive, and a payroll to manage? If this is the case, you will likely require the services of a full-time bookkeeper.

If, on the other hand, you don't send out very many accounts or your requirements are quite easy, then a casual bookkeeper for a few hours a week might be enough for you.

You should also keep in mind that some cloud-based accounting tools for small businesses may make account keeping quite easy if you are knowledgeable about financial principles and have an idea of what has to be done. This is something that you should keep in mind. A number of these can be used to send out invoices, and some of them can even be linked to your bank account so that you can quickly and easily reconcile your earnings and expenditures on a weekly basis.

In general, accountants are capable of performing the majority of the tasks that bookkeepers do. However, because their services are typically more expensive, it is recommended that you hire a bookkeeper for the more easy day-to-day tasks.

You should work with a professional accountant whenever your requirements get more involved.

Your accountant is a source of guidance that can be quite helpful if your company is expanding, or if you anticipate that it will expand in the future. They are able to provide guidance on a variety of topics, including as cash-flow management, budgeting, strategic planning, and the identification of key performance drivers, which refers to aspects of your business that might have a big influence on your profitability.

Accountants are also able to assist with tax planning, which involves organising one's personal and business finances in such a way as to minimise the amount of tax that must be paid.

When your company reaches a crucial new point in its development, such as when you take on a new partner, purchase a key asset, or sell the business, it is in your best interest to seek the counsel of an accountant.

When you first launch your company is yet another period when you should seek the services of an accountant.

You should consult an expert to determine which type of business structure will work best for your situation, such as operating as a sole proprietorship, a partnership, a corporation, or a trust.

How to choose the right person to work with

After determining whether you need a bookkeeper or an accountant for your company, the next step is to locate the professional who is best suited to meet your needs.

Depending on the specific services they provide for you, bookkeepers and accountants may need to be registered with the government as tax agents or consultants. You are able to verify their registration by visiting the Tax Practitioners Board.

Additionally, investigate whether or not they are members of any pertinent professional associations in the field. In order to keep their levels of expertise and knowledge at a high level throughout the course of their careers, many accountants will choose to become members of a professional body that mandates them to participate in ongoing training and professional development activities on an annual basis.

Think about if you would benefit more from hiring a bookkeeper or an accountant who has experience in your particular field. You should at the very least make an effort to locate financial professionals that have prior experience working with companies that are comparable to your own.

Also, keep in mind that different types of accountants specialise in different areas. Some of them are tax accountants, while others are more focused on providing strategic counsel for businesses.

Before you decide to engage an accountant or bookkeeper, you should make sure you talk to them in person or over the phone to get a sense of whether or not they are someone you will get along with well and with whom you will feel comfortable working.

Finally, you should enquire as to the prefered method of communication with them. If you have a query, are they glad to take a fast unplanned phone call from you, or do they prefer to organise meetings – and then think about how this might fit in with the manner that you like to work?