Maintaining orderly financial records is a common challenge that can sneak up on you quickly, sometimes overwhelming even the most hardworking of small business owners in Australia. A bookkeeper can often serve as a solution to this problem, ensuring every dollar that goes in or out of your business is recorded with precision. But what is a bookkeeper, and what is bookkeeping exactly? Bookkeeping involves the meticulous recording and organising of financial transactions, providing the clarity that Australian small business owners need to feel secure day-by-day.
While accounting (as opposed to bookkeeping) may provide broader financial insights and assist more directly with business planning, bookkeeping provides the foundation for accurate financial records. Taken together, accounting and bookkeeping can help your business hum along towards success. Often, however, a bookkeeper can provide enough of what your business needs to keep things running smoothly, until you’re ready to also work with an accountant.
Bookkeeping vs. Accounting: When To Use Each
Understanding the different roles of bookkeeping and accounting can help you decide when you might need one, the other, or both for your business. Bookkeepers keep meticulous records of daily transactions, handling tasks such as accounts receivable and managing the general ledger. This helps provide the financial accuracy you need to keep your business running smoothly. Accountants take a higher-level view of your finances, helping with tax planning and larger decision-making, such as how and when to invest in things like new equipment or expansion.
| Bookkeeping | Accounting |
| Focus of Job: Daily financial transactions | Strategic financial overview |
| Main Tasks: Data entry, bank reconciliation | Financial analysis, tax planning |
| Outcome: Accurate financial records | Strategic insights, tax optimisation |
A good metaphor for bookkeepers and accountants can be found in how most people receive healthcare. Your bookkeeper is like the nurse who sees to your daily and immediate needs. Your accountant is the doctor who comes in now and then to diagnose what’s needed to work with you on a treatment plan. Both play essential but different roles in maintaining your business’s financial health.
Bookkeepers Provide Foundational Value to Your Business
Let’s look more closely at what bookkeepers do and how they help maintain the financial health of your business. A good bookkeeper will handle various bookkeeping duties and tasks, including:
Handle Accounts Payable and Receivable
This ensures timely payment of bills and the collection of revenues for maintaining healthy cash flow.
Conduct Bank Reconciliations
Matching your business records with bank statements will confirm accuracy in your finances.
Process Payroll
Outsource the management of employee payments, including wages, bonuses, and deductions, efficiently and accurately.
Prepare Business Activity Statements (BAS)
Compile and submit required financial information to the Australian Taxation Office for tax purposes.
Monitor Cash Flow
A bookkeeper doesn’t just record transactions—they keep a close eye on your business’s cash flow. They can alert you to trends like late customer payments or increasing expenses, so you can make changes before issues get out of hand. Staying proactive with cash flow can help you avoid shortfalls and seize new opportunities with confidence.
Track and Manage Expenses
From petty cash and supplier invoices to digital subscriptions and travel, bookkeepers keep your expense records up to date and categorised, ensuring you don’t miss valuable tax deductions.
Liaise with Accountants and the ATO
Bookkeepers are often your business’s first line of communication with accountants and the Australian Taxation Office. They help gather supporting documents, answer queries, and make sure your records are audit-ready at all times.
Carefully managing your financial records with a bookkeeper in this way can significantly contribute to your business’s success and growth by ensuring no transaction goes unrecorded. You’ll be left feeling confident that, when you look at your books, they’ll be clear, clean, and reliable. In addition to bringing peace of mind, this should make everyday decisions and even some larger changes to your business that much easier to consider.
How to Choose The Right Bookkeeper
What to Look for and Why
Choosing a bookkeeper, in many ways, is similar to choosing a business partner. You want someone who will help clarify and streamline your financial processes. In many cases, a good bookkeeper will also offer some insights into how your business is faring and will contribute to your business’s stability and growth. Consider the following factors when selecting a bookkeeper:
Experience and Qualifications
Begin by evaluating the bookkeeper’s experience and qualifications. Inquire about their history with businesses similar to yours. This will give you a preview of how they might manage your own financial needs. Look for certifications or memberships in professional bookkeeping associations in Australia, such as the Institute of Certified Bookkeepers (ICB) or the Association of Accounting Technicians (AAT) Australia. Certifications show that the bookkeeper holds themselves to the sort of professional standards and ethics required to excel at their job.
Familiarity with Cloud-Based Accounting Software
In most cases, experience with cloud-based accounting software should be a requirement for bookkeepers working for Australian small businesses today. There are exceptions. In general, though, expect any potential bookkeepers to confirm their skill in using platforms like Xero, QuickBooks, or MYOB.
Commitment to Professional Development
Regulations, software, and best practices are often changing. A bookkeeper’s commitment to ongoing professional development is a good sign that they’ll be equally dedicated to their clients. Ask potential bookkeeping partners about any recent courses, workshops, or seminars they’ve attended. Find out how they keep up to date on any developments in their industry.
Alignment with Your Business’s Values and Needs
Your business’s values and needs are central to its success. Any bookkeeper you hire to help you with your finances should clearly understand and align with what makes your business tick. Discuss how you operate with any bookkeeping candidates. Share your long-term goals and clearly communicate how involved you expect them to be in pursuing those goals. This will help establish a smooth working relationship and avoid conflicts or misunderstandings.
Level of Service
Lastly, get clear on the level of service any bookkeeper you’re considering offers. Are their offerings comprehensive, including payroll, accounts payable and receivable, and financial reporting? If the needs of your business change or grow, can they keep up? Consider the future as well as the present in these terms.
When reviewing potential bookkeepers, pay close attention to their bookkeeper job description and the bookkeeper roles and responsibilities they’ve handled in previous positions. This will give you a good idea of their experience and capabilities in handling small business bookkeeping tasks.
Ask for References
Don’t hesitate to ask for references from other Australian small business owners. A reputable bookkeeper should be happy to provide testimonials or case studies showing how they’ve helped businesses similar to yours.
You Can Put Off Hiring a Bookkeeper for A While Longer, But Know What You’re Losing Out on When You Do This
Hiring someone else to assist with your financial management can bring a mix of excitement and fear for business owners. Maybe you’re concerned about costs. Or you prefer to remain self-sufficient. Or both! There are flipsides to each of these concerns, though.
The Other Side of The Cost Conundrum
Adding a bookkeeper is going to be a new expense. There’s no debating that. However, consider how much return you stand to make on the investment. A skilled bookkeeper will identify inefficiencies and errors in your recordkeeping, as well as missed opportunities. They will make sure every dollar that passes through your business is accounted for, help you prepare to meet tax obligations efficiently, and equip you with what you need to populate important financial reports. Increased profitability is a very possible outcome after you bring on a bookkeeper.
A professional bookkeeper can also help you avoid costly mistakes—such as late tax payments or missed compliance deadlines—which can result in penalties or cash flow problems. By keeping your accounts up to date, you’re also better positioned to access finance or grants, should you wish to grow or invest in your business.
The DIY Dilemma, Revisited
It’s normal for Australian business owners to wear multiple hats. This applies to record keeping as much as anything else. While this kind of hands-on approach should be celebrated, at a certain point the demands of bookkeeping on your time should be reconsidered. When you are grappling with spreadsheets and tax requirements, you aren’t focusing on your core business activities. With a bookkeeper on your team, you’re free to focus on what’s more important to the growth of your business. And they’ll likely manage your financial tasks more effectively than you as well, simply because it’s their job to do that.
Handing over your bookkeeping doesn’t mean losing control—it actually gives you more control, with real-time access to organised records and clearer insights into your financial health.
First Class Australian Businesses Deserve First Class Bookkeeping
By now the value of professional bookkeeping to your business success and growth should be clear. Partnering with a seasoned bookkeeping professional will bring stability to your business’s present and new potential to its future. A skilled bookkeeper can handle various tasks, including managing financial data, preparing end of year reporting, and providing valuable insights for your business strategy.
First Class Accounts boasts a network of qualified bookkeepers who are ready to align with your business needs and turn your financial recordkeeping from a chore into a strategic asset. These professionals understand what bookkeeping involves and can efficiently manage all aspects of your financial record-keeping, from daily transactions to complex financial statements.
Working with First Class Accounts gives you access to ongoing support and tailored solutions for your unique business challenges. Whether you need help with catch-up bookkeeping, payroll, BAS, or just want to streamline your admin, our local experts are here to help you every step of the way.
Ready to learn more about the benefits of professional bookkeeping? Book a free consultation with a bookkeeper near you today.
