Bookkeeper or accountant: what is the difference and which do you need?
Bookkeepers and accountants are often mentioned in the same breath, and many small businesses are not sure which one they need. In short, a bookkeeper keeps the records up to date through the year, while an accountant uses those records to prepare accounts and tax returns and to advise. Most growing businesses need both, sometimes from the same firm.
What a bookkeeper does
Bookkeeping is the day-to-day recording of your finances. A bookkeeper typically:
- Records sales, purchases and expenses in your accounting software
- Reconciles the bank accounts so the records match what actually happened
- Raises and chases invoices and processes supplier bills
- Keeps VAT-ready records so returns can be prepared quickly
- Produces basic reports, such as a profit and loss account and balance sheet
Good bookkeeping gives you reliable numbers during the year. See our [bookkeeping](/bookkeeping) service.
What an accountant does
An accountant works with the finished records to produce the formal outputs and give advice. An accountant typically:
- Prepares year-end accounts and files them with Companies House and HMRC
- Prepares corporation tax returns, self assessment returns and VAT returns
- Advises on tax planning, such as how you pay yourself and what you can claim
- Deals with HMRC queries and enquiries on your behalf
- Reviews the bookkeeping for errors before the year end
See our [accounts and tax](/accounts-and-tax) and [VAT](/vat) services.
Side by side
Bookkeeper | Accountant | |
|---|---|---|
Main job | Keeps accurate records through the year | Turns records into accounts, tax returns and advice |
Timing | Weekly or monthly | Mostly periodic: year end, tax deadlines, planning |
Output | Reconciled books, invoices, basic reports | Statutory accounts, tax returns, tax advice |
Looks | At what has happened | At what it means for tax, compliance and decisions |
Anyone in the UK can use the title bookkeeper, and the word accountant is not a protected title either. Professional designations from recognised bodies are what show that someone has been through formal qualification and is subject to a professional body's standards. It is worth asking which body, if any, a firm belongs to.
Which do you need?
- **Just starting out, with few transactions:** you may keep the books yourself in cloud software and use an accountant for the year end and tax.
- **Busy owner with growing volume:** hand the day-to-day records to a bookkeeper so you are not behind with VAT, payroll or supplier payments.
- **Planning to raise money or make bigger decisions:** you need monthly [management accounts](/management-accounts-explained), forecasts and someone senior who looks forward. That is the job of a [fractional finance director](/fractional-finance-director), who builds on good books and sound accounts.
Why it helps to have both under one roof
When the bookkeeping, accounts, tax and advice come from one team, errors are caught earlier, questions get one answer and nothing is lost between the books and the year-end. That is the idea behind an [outsourced finance function](/finance-function). Our guide on [what a finance function is](/what-is-a-finance-function) explains how the pieces fit together.