We often come across business owners who are asking themselves questions like these:
"Do I need an accountant or a book-keeper?"
"Will my accountant manage my daily transactions?"
“I can't see what’s happening in my business until my end of year accounts are done, when it's too late to make changes.”
It's certainly not surprising that so many owners are confused about the difference. As a result they are not actually getting what they need to help monitor and improve the profitability of their business.
Bookkeeping and Accountancy differ as services in terms of what value they deliver and most importantly they work on different cycles of the business process and financial workflow.
Both help fulfil important regulatory and legal obligations, but also both can and should be helping your business to run more efficiently, profitably and strategically. But many business owners are only getting the first of these two benefits. Part of the problem is the division of services between accountants and bookkeepers, but another part of this is the lack of awareness about how these necessary processes should be working pro-actively for your business. It’s often the case that the business is not getting the full value back from the services they are paying for.
BookCheck has from its inception aimed to tackle this divide and offers a more integrated rounded approach, to deliver greater value for money and greater actionable insights. So let’s look at the two and how they are related.
What is Book-keeping?
Book-keeping is the necessary process of tracking and recording all income and expenditure transactions. It is a necessary foundation of business accounts.
Book-keeping involves keeping records of payments to and from your business and summarising those transaction on a daily, weekly or monthly basis. A good book-keeper will be up to date with the requirements of recording different types of transactions and will reconcile everything possible.
What is Accountancy?
Whilst book-keeping is about keeping track of factual transactions, Accountancy is mostly concerned with producing formal or statutory year end accounts and filing such to Companies House. Also handing your Corporation Tax calculation and submission. It may include assistance with tax planning, investments, funding, expansion, acquisitions or mergers.
Accountants also have a different and higher level responsibility and level of training and certification than is required by book-keepers, due to regulatory and governance requirements.
Management Accounting is for the purposes of business management, rather than for regulatory compliance and can be produced over any timescale.
BookCheck strategically combines Book-keeping with Management Accounts to benefit your business
BookCheck has from the beginning built a team of both book-keepers and qualified accountants to solve the problem faced by many business owners of producing quality management accounts.
Any book-keeper will record and track your transactions but book-keeping can do so much more. Valuable management reports should be produced to allow you to make financial decisions accurately and to help safeguard against risks to the business’s financial position.
BookCheck’s book-keeping service fulfils the following necessary requirements:
- Recording financial transactions and reconciling
- Maintaining ledgers and accounts
- Filing the VAT return
- Payroll processing
But alongside this, our monthly Management Accounting reports deliver these important insights:
- Monthly Profit & Loss with Balance Sheet
- Gross margin - split any way that is valuable
- Graphs and charts to better visualise the underlying data
- Budget reporting with variances
- Comparison with previous years reporting
- Custom reports unique to your business
With the fast pace of modern business and instant online trading with suppliers and customers and with an ever more complex set of record keeping and regulatory obligations, these reports are vital to business transparency and visibility over things such as cash flow positions, exposure to risk and profitability of different aspects of the business.
Our combined approach avoids the chasm that often exists between the two services and this ‘bridge’ delivers a valuable picture of what's really going on with your business as a financial vehicle, how operational matters are related to financial outcomes in near real time and delivers clarity that really helps your business to manage and grow its profitability, to reduce its risk, and move forward strategically with good financial health.
With the advent of sophisticated cloud based bookkeeping tools such as XERO, book-keeping has enabled new ways to speed up the extraction of valuable business insights yet many business are not taking advantage.
Our entire focus is on using using integrated book-keeping with management accounting to put financial data insights at the heart of our client’s business operations.
Read more about our combined ‘Book-keeping with Management Accounts’ service and our BookCheck Advanced Reporting service, or if you want to discuss how we can make them work for your business then please contact us on 0800 883 0711 or [email protected].