Book keeping 3

Do I need a bookkeeper for my trade business?

Reading time: 3 minutes

They are often used interchangeably, but a bookkeeper and an accountant have different roles, both of which might be useful to you...

Most people struggle to tell the difference between bookkeeping and accounting, but they’re two separate jobs that often crossover.

What do bookkeepers do?

  • Bookkeeping is the first part of the accounting process, that’s why there’s sometimes an overlap between what they do and what an accountant does.
  • It’s generally more of an admin role, taking your bundles of paper and turning them into something orderly.
  • They record and organise your finances, keeping a track of money coming in and out and prepare self-assessment tax returns. They can pay your business bills and chase customers for payment too.
  • They don’t necessarily need qualifications, but definitely need a good eye for numbers and detail.
  • Bookkeepers usually charge by the hour or a fixed monthly fee – the more invoices and receipts you have, the more you’ll pay. Freelance bookkeepers typically charge between £15-35 an hour.
  • They can work on your books weekly, fortnightly or monthly depending on how complicated things are.
Book keeping 2

How is that different to an accountant?

  • Accounting covers a wider range of tasks than bookkeeping. They look at the bigger picture, delving into the detail from the bookkeeper.
  • An accountant can be a bookkeeper. But a bookkeeper can’t be an accountant. Accountants need specific qualifications and certifications.
  • Depending on the size of your business they might do audits, create financial statements and help you with forecasting for the future.
  • Small business accountants often do both roles, keeping an eye on your day to day finances and taking care of the bigger jobs like tax returns, year-end and planning.
  • Accountants usually charge a monthly or yearly fee. Check what this includes as some charge extra for phone calls or year-end accounts. Fees vary a lot depending on the size of your business and how complex it is. See our article on accountancy to find out more.
  • They’ll work on your finances monthly or quarterly and you’ll usually see them once or twice a year.
Book keeping 1

Which do I need?

If you’re a sole trader and not VAT registered, then a bookkeeper can work well. They’ll charge less, can manage daily finances and the more straightforward jobs like payroll and doing your VAT return. They help you keep everything in order, so you know what money you have and what you owe HMRC.

If you’re operating as a limited company or have employees, then it’s smart to find yourself an accountant. They’ll have more in-depth knowledge and will help you save time and money.

One way to do it is use a bookkeeper, who will charge less than an accountant, to keep on top of things throughout the year, but then hire an accountant to do the major end of year filing.

Keeping your paperwork and finances in check might not be your idea of fun but it’s important. A bookkeeper or accountant can take the pressure off you and let you stick to what you’re good at.

Accounting and tax