What's the difference between a bookkeeper and an accountant?

I often get asked, "Can you do my tax return?" As a BAS agent, I can see why some people might think I can, but the truth is, I can't. That’s actually the job of a tax agent accountant. So, what's the difference between a bookkeeper like me and an accountant? Let me explain it using an analogy that might make it a bit easier to understand. 

Think of an accountant and a bookkeeper like a doctor and a nurse. Both are essential in keeping you healthy, but they have different roles. The nurse (like the bookkeeper) takes care of your day-to-day needs—checking your vitals, monitoring your progress, and ensuring you're comfortable. The doctor (like the accountant), on the other hand, is responsible for diagnosing the big picture, making decisions about your treatment, and prescribing medications. 

In the business world, bookkeepers handle the day-to-day financial tasks. We track your income and expenses, handle payroll, make sure your bills are paid on time, and keep your financial records organized. Essentially, we help you manage the details so you can focus on running your business. 

As a strategic bookkeeper, I also go beyond just tracking the numbers. I provide advice on your financials to help you make informed decisions that can drive your business forward. I look at your cash flow, help you identify potential issues before they become big problems, and offer strategies to keep your finances healthy. This is where the analogy shifts a bit—I'm like the nurse who can give you some guidance on your health and well-being.

Accountants, however, take things a step further. They analyze the financial information that bookkeepers like me provide and use it to prepare reports, give strategic advice, minimize tax liability, conduct routine and yearly audits, provide tax planning  and most importantly, file your tax returns. In Australia, only a tax agent (who is often an accountant) can legally lodge your tax return with the Australian Taxation Office (ATO).

I also get asked about BAS (Business Activity Statements). As a BAS agent, I can help you prepare and lodge your BAS, which is a key part of your tax obligations. But even though I can handle this aspect of your taxes, I still can't do the final step of lodging your full tax return. That’s something only a registered tax agent can do.

In summary, if you think of your business's finances like your health, you need both a bookkeeper (like a nurse) and an accountant (like a doctor) to keep everything running smoothly. Each plays a crucial role, and together, they make sure your financial "health" is in tip-top shape. So, the next time you need help with your tax return, remember to call your accountant (who’s probably a tax agent), and if you need someone to keep your day-to-day finances in order and provide strategic financial advice, that’s where I come in!