Save content
Have you found this content useful? Use the button above to save it to your profile.

Are you an accountant, a bookkeeper or both?

26th May 2015
Save content
Have you found this content useful? Use the button above to save it to your profile.

Mark Lee explores some of the differences between bookkeepers and accountants and how they can work together to serve clients.

Many business people are unaware that anyone can call themselves an accountant. This isn’t just a question of whether someone has an appropriate professional qualification. The public also often use the term ‘accountant’ when they mean a bookkeeper or a tax adviser. And of course many accountants provide bookkeeping and/or tax services. 

It matters not where any of us might draw the line between one service and another. What matters is whether clients understand what services they need, what they are paying for, what they can expect and whether they are getting value for money.

A recent article from Mike Foster on AccountingWEB considered a perceived threat to the demand for bookkeeping services as distinct from accounting services. Mike concluded that the threat caused by online systems was more theoretical than real.

In an effort to explore a modern approach to the distinction between bookkeeping and accounting services I spoke recently with Ruth Noel. She has been expanding her online bookkeeping business over the last two years and wants to see accountants collaborating more with independent bookkeepers. I asked her why?

* * *

Ruth Noel (RN): “When accountants and bookkeepers work together their clients reap the rewards. Accountants are specialists in strategic planning, risk management and financial analysis. When they partner with a bookkeeper they can put all their resources and effort into the areas that they enjoy the most, and rely on their bookkeepers to do the ground work and manage the day to day administrative tasks for their clients.”

Mark Lee (ML): “That’s an interesting perception of what accountants are experts in and of what they do. Many might well prefer to think that their main skill is in the production of regular and annual accounts and interpreting the results therefrom. Which is presumably what you mean by ‘financial analysis’.”

RN: “Yes it is. But in my experience many accountants find the basic bookkeeping boring, beneath their skill set and a drain on time. I know that most modern accountancy exams focus on developing and testing far more skills than simply bookkeeping and many accountants have told me that they wish they had more time to focus on their other skills that will help their clients.”

ML: “Ok, so what do you consider to be the benefit to accountants in encouraging their clients to use a separate bookkeeper?”

RN: “Some of the accountants I work with have raised this question before too. They are initially worried this means less work and lower revenue for their business. In practice that rarely happens.

As a specialised bookkeeping service we provide a service many accountants cannot provide, using the latest innovations, software developments and technology to deliver superior results. With the bookkeeping systems I create, the accountants I partner with can do more for their clients, they are able to apply more of their skills, and create stronger benefits. They can actually charge more for their time, because they now focus on advanced activities (planning, opportunity assessments, risk management etc.) for their clients.”

ML: “Can’t accountants simply offer bookkeeping services in-house?”

RN: “They can, and if the accountant themselves or their in-house bookkeeper is well trained they can achieve good results. However, there has been huge progress in the bookkeeping industry in recent years. Many accountants and bookkeepers have not jumped on board yet, including many in-house teams. By collaborating with an advanced bookkeeping service which takes advantage of state-of-art systems and processes, accountants can create a competitive advantage, save a massive amount of time, create cost savings and grow their business faster as a result.”

ML: “Why do you feel that online bookkeeping is such a big opportunity for accountants and for small businesses?”

RN: “That is a great question, and the area where we add the most value for our clients. Online bookkeeping systems creative huge time and cost savings for our clients, whilst at the same time providing massive business efficiencies. In other words, tailored and efficient online systems for monthly bookkeeping, accounts preparation and administration give our partners and clients the ability to focus on the important areas of the business, laying the foundation to take the business to a new level.”

ML: “Whilst that makes sense I have heard many small business owners and their accountants dismissing any system that requires the client to enter information themselves. Is there a way around this?”

RN: “I agree, this is a key point for many clients. It’s understandable that entering information and data themselves will take up more of their time. And honestly, I’m sure that bookkeeping is not the main reason why they set up business! Let’s look at this example: Having a great accounting system is like having the best Mercedes in a Formula One race. It has the potential to be unstoppable, but it depends on who is in the driving seat. For small business owners who want to be ahead, like Lewis Hamilton, you need to bring in the right help so you can get the information on the system without taking up your valuable time.”

ML: “Why do you think Accountants should work with external bookkeepers when taking on new small business start-up clients?”

RN: “Another area close to my heart, I love helping entrepreneurs and people with a vision to get started and build a successful business. In my experience it is cash-flow that often is the most difficult thing to manage for new business owners. Hiring an accountant is an important part of any start-up, to cover legalities and long term vision and strategies.

To get a business off with a bang you also need strong systems and management processes. That is where bookkeeping services come in. A good bookkeeper will partner with clients to bring their vision to reality in the day to day operations of the business. This allows the client to concentrate fully on their passion, without distractions from paperwork, invoices, accounts and other administrative burdens. When an accountant and bookkeeper partner up to support a client, they offer double the expertise and create stronger growth and potential long term success. The success of their clients will in turn create more success for their own businesses.”

ML: “What do you think is the main reason that Accountants hold back from taking advantage of the most advanced bookkeeping services?”

RN: “For many accountants it is fear of the unknown. A lot of accountants still have the frame of mind that they need to be the sole financial contact point for their clients. The concept of partnering with another service is foreign in the profession, and outsourcing certain services is a topic most accountants avoid. They try to be everything to their clients, but really spread themselves very thin in the process and it is their clients who suffer.

Technological advances are traditionally slow to be taken up by accountants. The profession is not known to be a leader in embracing innovation and new ideas. An example is the huge amount of accountants who still have no websites, or if they do, have sites that cannot be used effectively on mobile devices.

Advanced online bookkeeping services provide accountants and clients with a new world of opportunity, to achieve better results, reach goals faster and do it more efficiently and using more cost effective systems.”

ML: “In my experience there are 3 types of accountants to consider here. Those who are in start-up mode themselves; those with established practices; and those who are keen to grow their client base. I suspect that middle group, with their established practices, feel less pressure to change what they do or to start working with an external bookkeeper if they have not done so before. What would you say to them?”

RN: “So far I have only encountered progressive accountants who are using online bookkeeping services to complement the services they provide to their clients. But I am sensing a shift in the landscape and more and more accountants are jumping on board. The partnerships we are building create strong benefits for our clients, it supports our accountant partners to grow their businesses and we are expanding through these collaborative efforts too.

I strongly believe that combining skills and expertise is the way forward to create win-win outcomes for everyone involved.”

Ruth Noel runs taxtwerk and can be contacted on 0330 321 1136

Mark Lee is consultant practice editor of AccountingWEB. As a speaker and mentor his focus is on helping accountants who are determined to be more memorable and successful. He also facilitates The Inner Circle group for accountants and is Chairman of the Tax Advice Network of independent tax specialists who provide support to smaller practices


Replies (2)

Please login or register to join the discussion.

By johnjenkins
26th May 2015 21:10

crap in

crap out, doesn't matter what new fango tango system is used.

I love dealing with bits of paper. It teaches me about the business I'm the Accountant for, and allows me the privelege of advising correctly.

I do take the point that some Accountants do not want to do this work for whatever reason.

It may all comes down to fees, so it could be that lifestyle dominates decisions.

We have actually thought about a mobile Accountancy service whereby we use our own cloud together with VT. Set most of our clients (with their own office) up and just visit them on a monthly basis inputting and reconciling. The same rule applies. Whoever inputs must know what they are doing.

Thanks (1)
By abaco
27th May 2015 16:41

Back to the Future?

The simplicity of bookkeeping programmes such as Quick Books or Kashflow means that once they are set up, it becomes possible for most smaller business to dispense with a dedicated bookkeeper altogether, either external or in-house. Auditing apart, we increasingly see the role of the accountant on the other hand concentrating on mentoring and advising clients on their plans for the future of their businesses and investigating the financial viability or otherwise of such plans.

Thanks (0)