When it comes to outsourcing your business finances, it can be confusing as to whether you should hire a bookkeeper, an accountant or a combination of both. Understanding what these number-crunchers actually do will help you decide.
Some finance professionals provide services for all aspects of business finance, while others specialise in certain areas. These specialisations might include choosing accounting software and setting up your accounting system, entering data, preparing BAS, developing performance indicators, producing management reports and finalising company tax returns.
What exactly do these specialist finance professionals do; when do you need them, and what do you need to consider when hiring them?
A bookkeeper processes receipts and bills, prepares invoices, processes payroll and chases outstanding debtors. They should have an understanding of how accounting software works; however, they wouldn’t be expected to process complicated transactions. Alternatively, online solutions like receipt scanning (Receipt Bank, Invitbox, and Shoeboxed) or debtor tracking (Debtor Daddy, xocashflow and Bilbus) can replace much of the mundane duties of a bookkeeper.
BAS agent/professional bookkeeper
In Australia there is a concept known as BAS (Business Activity Statements), and anyone who handles these statements for a fee or reward must be a registered BAS agent. In addition to bookkeeper tasks, the duties of a BAS agent include setting up the accounting system, coding transactions, dealing with complicated GST issues, and preparing payment summaries. They can submit BAS online via their own ATO portal and may assist in sorting business accounts in preparation for the tax accountant at the end of financial year. The frequency you engage with a BAS agent typically aligns with how often you report to the ATO. A registered BAS agent meets stringent educational and experience criteria prescribed by the Tax Practitioners Board (TPB). It’s important to be aware if someone charges for BAS-related duties they need to be a registered BAS agent. A list of registered BAS agent associations can be found on the TPB website here.
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Software implementation specialist
An accounting software implementation specialist can assist with selecting accounting software, setting up your accounting system, training in how to use the software, and ongoing support. It seems every man and his dog is an accounting software expert so it’s worth knowing the major accounting software providers have their own partner programs, and list accredited partners on their websites. Here is a list of Xero Certified Advisors and MYOB Certified Consultants.
A tax accountant assists the business in setting up its business structure, minimising tax, preparing financial statements and meeting compliance obligations. Typically you speak with a tax accountant as you start your business, and the old-school method is to touch base with them as issues arise, or at the end of the financial year. As with a BAS agent, a tax agent has to be registered with the Tax Practitioners Board. A list of registered tax agent associations can be found on the TPB website here.
A management accountant assists with strategic planning, business growth, cash flow and budgeting. This in turn assists you in making informed business decisions. A management accountant can also perform a regular review of your financials to ensure you are heading in the desired strategic direction.
With so many number crunchers available, no wonder it’s confusing to try and decide who’s who in the numbers zoo! To further complicate things, businesses offering these services don’t usually fall neatly into the defined baskets, and it’s likely your needs will evolve over time. The ideal scenario is to build a trusted team to support the business, who communicate with one another, understand what is required of each other, what tasks you want them to undertake, and can be called upon when necessary. A single business may offer this complete solution, but don’t be afraid to work with independents who offer you the specialist services, or engage or train staff internally to complete your number-crunching team.
What finance professionals help your business run smoothly?