Do I need an accountant or bookkeeper?

[proofpositive]

Hi,

I run a small sole trader service based business. So my understanding is that it is a relatively simple business, no employees or VAT or even stock to worry about.

However, I hate doing my accounts. I just find it a bad use of my time and skills (or lack of). Currently I have an automated bank feed into freeagent, and add in extra expenses etc. manually. It takes me far too long, I always leave it to the last minute, and I also feel a bit vulnerable to HMRC because of my lack of knowledge (and of course, like anyone, I want to keep my tax bill to a minimum)

So the other day, I decided to get an accountant for 2013/14's tax return (or at least that was what I thought I need). I asked my colleague - who does the same thing as me, and he recommended somebody who he uses and who had also been recommended to him by others.

I met with this person, and they talked about a monthly fee to do my tax return and talked about ways they could help me to save money. They have even offered to run over my current tax return before I submit it, to check for glaring errors. However, when I looked at the business card when I left, they are a bookkeeper, not an accountant. So I am now really confused, because my understanding is that freeagent is almost like a book-keeper. I did mention to him that I currently use freeagent, and he said I can continue to use it and print off the details when I give him the paperwork.

So now, I am really confused - can a bookkeeper give me the help I need (IE advice on how best to do my tax return, advice on what I can claim or not), or am I better off sticking with freeagent and getting an accountant?

I am sorry if this is a stupid question, but I just don't want to make a big mistake - however, the idea of help to check this tax return really appeals to me!

Thanks in advance for any help!

 

[lesvatadvice]

You should ensure that the person you appoint is properly qualified. Some bookkeepers are, and some accountants are not. Your first point was that you hate doing your accounts. That is good reason to appoint a suitable professional.
I would ask their qualifications, and what Professional Body they belong to. If they are suitably capable and qualified, and subject to oversight, then go ahead.

 

[UK Contractor Accountant]

With Freeagent you do not print off details at the year end - its Cloud based so you just grant your Accountant access rights and he/she prints off what reports they want and do the neccessary year end journal adjustments.

 

[Berics Accounting]

Hi

I have sent you a private message with a pdf that details some information about bookkeepers. but would have to agree with lesvatadvice

 

[Mitchells Bristol]

So now, I am really confused - can a bookkeeper give me the help I need (IE advice on how best to do my tax return, advice on what I can claim or not), or am I better off sticking with freeagent and getting an accountant?
!

Any individual can give you the help you need, as long as they have sufficient knowledge and experience in the area. They may be called an accountant, a chartered accountant, a book-keeper or a flight attendant - what they call themselves doesn't really matter. The question is do they have the skills needed to provide you with the ongoing suppot and advice that you need?

It's impossible for anyone on this forum to answer that, as you will just receive general comments about the relative merits of using a qualified vs unqualified accountant. There is no need for someone to be qualified in order to submit your tax return for you.

I used to work with someone who was a qualified chartered tax adviser (and had been for 15 years)He decided that he wasn't getting value out of his professional subscription any longer and ceased membership, so now he is unqualified but that doesn't make him any worse a tax advisor for it.

The key from your message is that this "book-keeper" has been recommended by a number of business owners, who all appear comfortable with their ability - so if you are equally comfortable having met the individual then there is no reason not to use them.

The main thing you lose is a grievance procedure - in that if they were qualified you could complain to their Institute.

 

[MyAccountantOnline]

Hi

I have sent you a private message with a pdf that details some information about bookkeepers. but would have to agree with lesvatadvice

As the question has been asked on a public forum it would be great if you'd put any reply here for all to see, and do bear in mind the forum rules the OP didnt ask for a private message in reply.

 

[Berics Accounting]

Ah, but of course...

In my experience, as a sole trader, a bookkeeper would be completely sufficient although, not essential. Freeagent is a good piece of software to use as a sole trader doing their own accounts. A bookkeeper would be a great tool to utilise if, like in your post, you hate doing your own accounts. Chances are, a bookkeeper will be able to complete your work in a much shorter time frame than you could yourself, (due to their experience.)

With regards to your self-assessment, again, a competent bookkeeper would have no problems completing this for you. It would be worth asking what their qualifications and experience were. Many bookkeepers only have working experience, and no specific qualifications. A bookkeeper with an ATT (Association of Taxation Technicians,) qualification would do a good job for you.

Generally, accountants are only really needed when you become a limited company, and even then, I would only use them for year end accounts. The main reason is that a good bookkeeper would do the same job at a far cheaper rate.

 

[MyAccountantOnline]

This is my view as a professionally qualified and experienced accountant working in practice (FCCA)

A bookkeepers role is to record transactions, in your case entering data into Freeagent.

An accountants role is to use the records prepared by the bookkeeper to prepare your accounts and tax returns, and give you tax and business advice.

A professionally qualified accountant will spend many years gaining the necessary experience and qualifications to do what they do.

Anyone can call themselves a bookkeeper.

 

[MyAccountantOnline]

Generally, accountants are only really needed when you become a limited company, and even then, I would only use them for year end accounts. The main reason is that a good bookkeeper would do the same job at a far cheaper rate.

I disagree entirely.

 

[Newchodge]

This is my view as a professionally qualified and experienced accountant working in practice (FCCA)

A bookkeepers role is to record transactions, in your case entering data into Freeagent.

An accountants role is to use the records prepared by the bookkeeper to prepare your accounts and tax returns, and give you tax and business advice.

A professionally qualified accountant will spend many years gaining the necessary experience and qualifications to do what they do.

Anyone can call themselves a bookkeeper.

Anyone can call themselves an accountant

 

[Berics Accounting]

I think things seem to be getting a little heated

Personally, I think your best bet is to find out their qualifications and experience. Follow your instinct. If you arent comfortable with them, go somewhere else

As taxonomy mentioned, if a number of business owners have recommended this person then that should give you a little bit of ease.

 

[MyAccountantOnline]

Anyone can call themselves an accountant

VERY sadly yes, hence why I noted 'a professionally qualified accountant'

It does annoy me greatly that I spent years working very hard to gain the qualifications and experience I have, I now continue to update my knowledge every year with ongoing training, I pay insurance and professional subscriptions as a professionally qualified accountant and yet ANYONE can claim to do my job with NO experience, NO qualifications and in fact NO idea of what they are doing, and to make it worse many people have no idea that this is the case!

 

[Berics Accounting]

But in the same light, I have spent many years working very hard to gain the qualifications and experience I have, continuing to update my knowledge every year with ongoing training. I pay insurance and professional subscriptions and yet, I am just a lowly bookkeeper. Apparently, anybody can liken themselves to me and call themselves bookkeepers. Without understanding individuals qualifications, experience and training, comments such as, 'Anyone can call themselves.........' are pointless and far too negative for a forum that is aimed at helping people with their business. There are already too many people in all industries creating bad names for their specific careers.

In my opinion, it is far better to stick to the points that will actually achieve a resolution to the original post. Investigate the bookkeepers qualifications and experience. Perhaps ask for additional client references. And, if you still arent happy, keep looking

 

[MyAccountantOnline]

I'm not dismissing bookkeepers at all.

Some bookkeepers are very good indeed and it's a shame they haven't pursued professional accountancy qualifications as some I've known, and know now, would indeed make super accountants.

BUT their is, and should be, a distinction between what accountants do, and what bookkeepers do - it's why they have a different name after all

OP if I may I liken the comparison to a nurse and a doctor or a dental nurse to a dentist. Both very valuable roles but very different duties and responsibilities and levels of skill and knowledge.

 

[Bob]

Nicola would be well aware that I agree with her
Many of the problems that arise on here are caused by a member receiving poor service from an accountant or bookkeeper and then at a late stage realising that because they are not a member of a professional body, there is no-one to whom to complain
This can even apply to firms that are franchisees of for instance TaxAssist as they do not have a disciplinary process unless the accountant is actually a member of a professional body. I can assure you that professional bodies take complaints very seriously and do investigate problems that are discreditable to either the member or the profession

 

[Newchodge]

I'm not dismissing bookkeepers at all.

Some bookkeepers are very good indeed and it's a shame they haven't pursued professional accountancy qualifications as some I've known, and know now, would indeed make super accountants.

BUT their is, and should be, a distinction between what accountants do, and what bookkeepers do - it's why they have a different name after all

OP if I may I liken the comparison to a nurse and a doctor or a dental nurse to a dentist. Both very valuable roles but very different duties and responsibilities and levels of skill and knowledge.

I agree entirely. A bookkeeper is not an accountant and vice versa. A lot of harm has been done to both professions by those who claim the title but do not produce the necessary standard of work. Unfortunately you cannot assume that qualified = good and non-qualified = bad, in either profession. A benefit of using a qualified person is the grievance procedure available when things go wrong. But that is a bit late.

There is no real substitute, in my opinion, in any profession, trade or business, for personal recommendation. But even that only works if the person making the recommendation understands how well the needs of the person needing a recommendation chimes with their own experience.

 

[Fred_the_frog]

VERY sadly yes, hence why I noted 'a professionally qualified accountant'

It does annoy me greatly that I spent years working very hard to gain the qualifications and experience I have, I now continue to update my knowledge every year with ongoing training, I pay insurance and professional subscriptions as a professionally qualified accountant and yet ANYONE can claim to do my job with NO experience, NO qualifications and in fact NO idea of what they are doing, and to make it worse many people have no idea that this is the case!

But when a client asks 'What qualifications do you have?' to the unqualified accountant, you can bet a little bit of sweat will run down his/her forehead. When they get asked a question and don't know the answer, the client will start questioning whether the reduced fee they are offering is worth it, for the half baked service.

Whereas you can confidently answer the 'Are you qualified?' question and will not cause doubt as to how good you are when you don't know the answer to a question. You're not going to lose a client that you've worked so hard at marketing to, just because you aren't qualified.

 

[MyAccountantOnline]

But when a client asks 'What qualifications do you have?' to the unqualified accountant, you can bet a little bit of sweat will run down his/her forehead. When they get asked a question and don't know the answer, the client will start questioning whether the reduced fee they are offering is worth it, for the half baked service.

Whereas you can confidently answer the 'Are you qualified?' question and will not cause doubt as to how good you are when you don't know the answer to a question. You're not going to lose a client that you've worked so hard at marketing to, just because you aren't qualified.

I think most of us accountants who have worked hard to become professionally qualified get a wee bit miffed that anyone can claim to do what we do, but the biggest issue I have is when the public just don't realise that.

If someone is happy to use an unqualified accountant, or a bookkeeper to undertake an accountants work, that's fine as long as they are fully aware of that and do appreciate the consequences.

It's an age old issue and will rumble on and on.........

 

[Paul_Rosser]

What you actually need really depends on you.

A bookeeper will generally assist in keeping your company records and may help a bit with making sure your tax return looks ok, but unless they are also a qualified accountant won't be able to offer you the same advice regarding tax saving as an accountant.

An accountant won't do your bookkeeping (unless thats part of the service), but will offer you up to date tax advice.

If you are happy to keep your own company records then you need an accountant, if you want someone to look after your records then you need a bookkeeper. If you want both then you need a bookkeeper and an accountant.

 

[Philip Hoyle]

But when a client asks 'What qualifications do you have?' to the unqualified accountant, you can bet a little bit of sweat will run down his/her forehead. When they get asked a question and don't know the answer, the client will start questioning whether the reduced fee they are offering is worth it, for the half baked service.

Trouble is that some book-keepers and unqualifieds end up charging more than qualified accountants. I've seen it a few times with "book-keepers" spending a lot of time doing unnecessary work, usually by entering every last single transaction on Sage taking many hours when the job could have been done in a fraction of that time by more efficient methods. I've had three recent cases where a book-keeper has managed to charge thousands when I could have cut a few corners and done the whole job for a few hundred!

 

[Mitchells Bristol]

but unless they are also a qualified accountant won't be able to offer you the same advice regarding tax saving as an accountant.
.

How do you know? Why not take it a step further and suggest they won't be able to offer advice on tax savings unless they are CTA qualified.

Take a top ten accountancy practice, who in my experience generally put their staff through the ACA examinations. So after three years, say, you can potentially get an audit junior/senior who has qualified as ACA but has always worked on audits and in a not necessariy client facing position.

That employee then leaves to work for a small practice looking after small owner managed businesses. Are you going to get better tax advice from this individual who has just qualified and always worked in audit, or are you going to get better advice from an unqualified accountant who has worked with small owner managed businesses for over 30 years? The answer to this is obvious, and you simply cannot generalise about qualified vs unqualified accountants in this way.

I have worked with people who fly through their exams, gaining top marks, and winning prizes but are useless at their job, and similarly I have worked with people who are great at their jobs but struggle to get through the professional exams. It is two completely separate disciplines.

 

[Paul_Rosser]

How do you know? Why not take it a step further and suggest they won't be able to offer advice on tax savings unless they are CTA qualified.

Take a top ten accountancy practice, who in my experience generally put their staff through the ACA examinations. So after three years, say, you can potentially get an audit junior/senior who has qualified as ACA but has always worked on audits and in a not necessariy client facing position.

That employee then leaves to work for a small practice looking after small owner managed businesses. Are you going to get better tax advice from this individual who has just qualified and always worked in audit, or are you going to get better advice from an unqualified accountant who has worked with small owner managed businesses for over 30 years? The answer to this is obvious, and you simply cannot generalise about qualified vs unqualified accountants in this way.

I have worked with people who fly through their exams, gaining top marks, and winning prizes but are useless at their job, and similarly I have worked with people who are great at their jobs but struggle to get through the professional exams. It is two completely separate disciplines.

Yes of course there are always expections, but someone calling themselves a bookkeeper provides a very different service to someone who calls themselves an accountant which is what the OPs question was regarding.

I've worked with at least 500 accountants and whilst there are a mixture of good and bad they all had a general grasp of the basics when it comes to accounting, of the bookkeepers I've met most have been people who have had no training at all and simply go into a company and enter all the receipts for the business into a spreadsheet/sage etc.

Is this re-write better for you ?

"but unless they are also an accountant won't be able to offer you the same advice regarding tax saving as an accountant"

 

[kjmcculloch]

It seems we've moved to the difference between bookkeepers and accountants. A. few years ago the definitions were very clear, the bookkeeper did everything upto and including trial balance. Now it’s not so clear. The bookkeeping role has expanded with many bookkeepers becoming more and more qualified and offering more and more services.

It is now not strange to see bookkeepers offering self assessments and final accounts, once very much the domain of accountants. Think of it like nurses and doctors and look at how the services offered by the nurse has developed as they became more qualified over the past few years. Bookkeepers and accountants have done the same.

The key, as mentioned is to get recommendations, check qualifications and insurance. As said anyone can legally call themselves and accountant or bookkeeper. Choose what you need. For instance you wouldn't go to a surgeon with a cold because they are more qualified. The chances are a pharmisist would be better suited to your needs. Equally as a small sole trader with less complex needs only you can decide whether it's a good qualified bookkeeper you need, or an accountant.

I do disagree with Nicola though, I find it quite cutting when you say many bookkeepers should stick in and become accoutants. Many don't want to be in the same way many nurses don't want to be doctors. Bookkeeping is a part of accounting, the same as auditing. Bookkeeping is not a stepping stone to being an accountant, nor is it something to be pitties that someone stopped at being a bookkeeper.

Kris

 

[James @ ICB UK]

Kris' post makes a good point regarding the differences.

If you have a good bookkeeper who is qualified and regulated by a professional body, they will know where their knowledge ends and most likely have several qualified accountants they can pass work onto.

Regardless of calling themselves bookkeeper or accountant, if they are unqualified and un-regulated, the chances are they will not be very good.

I think proofpositive definitely needs a bookkeeper, who should be with a professional body, and they will be able to recommend a good accountant who they can work closely with for any tax advice beyond their own qualifications.

The bookkeeper in question obviously comes recommended, I would check they have insurance anyway as it is a very good idea.

The ICB (Institute of Certified Bookkeepers) provides a free Find a Bookkeeper service, all ICB practising members have insurance and are covered by ICB's support. I cannot provide a link here but just Google ICB Bookkeeper for more information.

 

[Paul_Rosser]

Thanks James and Kris for some very good comments.

 

[Bob]

The ICB (Institute of Certified Bookkeepers) provides a free Find a Bookkeeper service, all ICB practising members have insurance and are covered by ICB's support. I cannot provide a link here but just Google ICB Bookkeeper for more information.

A quality first post. It would be good if you were able to continue to contribute to the forum

 

[proofpositive]

Hi, everybody, thanks for all of your replies, I have had a proper look at the qualifications of this bookkeeper, and they are qualified and also registered with the professional body who posted (ICB). They also work within a company with an accountant so hopefully there is that back up too. This person has come very highly recommended, but it's important to me to get a good understanding myself, which you have all helped me to do, and. I have made the decision to go ahead and sign up, thanks again for your help,

 

[MyAccountantOnline]

I do disagree with Nicola though, I find it quite cutting when you say many bookkeepers should stick in and become accoutants. Many don't want to be in the same way many nurses don't want to be doctors. Bookkeeping is a part of accounting, the same as auditing. Bookkeeping is not a stepping stone to being an accountant, nor is it something to be pitties that someone stopped at being a bookkeeper.

Kris

Kris I quite appreciate some bookkeepers have no desire to become accountants by undertaking further studies, attaining professional qualifications and undertaking all that's required to become a professionally qualified accountant, it is hard work. But if a bookkeeper doesn't want to do that they should stick at doing what they do.

 

[MyAccountantOnline]

Hi, everybody, thanks for all of your replies, I have had a proper look at the qualifications of this bookkeeper, and they are qualified and also registered with the professional body who posted (ICB). They also work within a company with an accountant so hopefully there is that back up too. This person has come very highly recommended, but it's important to me to get a good understanding myself, which you have all helped me to do, and. I have made the decision to go ahead and sign up, thanks again for your help,

That's great that you've made an informed decision hope all goes well for you and thank you for letting us know.

 

[kjmcculloch]

Nicola, you assume that bookkeepers don't undertake studies, attain professional qualifications and cpd. I find this frankly quite insulting.

 

[MyAccountantOnline]

Kris what I said was -

..... I quite appreciate some bookkeepers have no desire to become accountants by undertaking further studies, attaining professional qualifications and undertaking all that's required to become a professionally qualified accountant, it is hard work.

I have at no point said that bookkeepers ''don't undertake studies, attain professional qualifications and cpd'' That would be a ridiculous and incorrect statement

I have the utmost respect for good bookkeepers and work closely with some extremely good bookkeepers who do a super job undertaking bookkeeping work.

With the greatest respect shall we now close this thread. The OP has had his question answered and has now made an informed decision on who he wants to undertake the work for him.

 

[James @ ICB UK]

A quality first post. It would be good if you were able to continue to contribute to the forum

Thanks, I will keep an eye on here.

 

[James @ ICB UK]

Hi, everybody, thanks for all of your replies, I have had a proper look at the qualifications of this bookkeeper, and they are qualified and also registered with the professional body who posted (ICB). They also work within a company with an accountant so hopefully there is that back up too. This person has come very highly recommended, but it's important to me to get a good understanding myself, which you have all helped me to do, and. I have made the decision to go ahead and sign up, thanks again for your help,

It is always good to hear ICB bookkeepers come highly recommended. Best of luck with your business.