Depending on the type of services that your small business requires it is important to know the difference between a Bookkeeper and a Tax Agent (Accountant).
Most people usually ask this question because it is very difficult to know where the Bookkeeper’s role ends and where the Tax Accountants role begins. To make matters worse, sometimes the two are interrelated. Some Tax Accountants provide both a Bookkeeping service as well as a Tax Accountant service. Generally Tax Accountants with the appropriate licences can do all the work of the Bookkeeper.
Difference in Scope of Services
In Australia, the Bookkeepers role includes the following:
- Accounts Receivable: Management of quotes, sales orders, invoicing , receipting and payment collection
- Accounts Payable: Management of quotes, purchase orders, supplier invoices, payments and reconciliations
- Bank Reconciliations
- General Ledger Accounts Reconciliations
- Payroll: Management and advisory including Single Touch Payroll
- Preparation of Financial Statements such as the Monthly Profit and Loss (P and L’s) and Balance Sheet.
- Business Activity Statements: Management of all the required tax lodgements including GST, Fuel Tax Credits, Wages and PAYG W (tax instalments for wages).*
- Instalment Activity Statements: Management of all the required tax including PAYG I (tax instalments for income tax) *
* Services provided by a Bookkeeper who is registered BAS Agent.
In Australia a Bookkeeper who is a registered BAS agent should have a BAS agent registration number. To verify this registration number, you can contact the Tax Practitioners Board or check on their website.
A Tax Accountant can also do all the Bookkeeping services as well as Tax Agent services where they are a registered Tax Agent in Australia.
While a Bookkeeper’s authority ends with the preparation of BAS (business activity statement) comparatively that of a Tax Agent involves a much broader area of service with regards to the management of Tax for individuals and businesses. Only a registered Tax Agent can charge a fee for the service of preparing income tax returns and individual tax returns.
Should you hire a Bookkeeper or a Tax Accountant?
The answer to the question is that it depends:
Firstly if your business requires that you monitor your accounts throughout the year then you should hire a dedicated Bookkeeper or ensure that the Tax Accountant has a Bookkeeping service.
Tax Accountants who specialise only in Tax will probably cost you less if your books are neat and tidy for them to prepare your income tax as well as provide you with other tax advisory services. In addition Tax Accountants specialising only in tax may only see you once a year at tax time. For more information about what a Tax Agent does you can visit the Tax Practitioners Board.
A Bookkeeper will be be able to see you more frequently as they are involved with your daily transaction reporting as well as provide updates and advisory on your performance in a more timely manner.
If you still have any questions with regards to hiring a Bookkeeper-BAS Agent or a Tax Agent please do not hesitate to contact me here.
Your Friendly Bookkeeper,