BookKeepers
How bookkeepers and accountants work together
Where do the responsibilities of bookkeepers end and those of accountants begin? Annie Makoff speaks with AAT members to find out how they collaborate.
For the completely uninitiated, bookkeeping and accountancy are sometimes used interchangeably in conversation, incorrectly seen as one and the same. This is, of course, far from accurate. At its most basic, one is responsible for data entry and recording and organising records, while the other is interpreting this data and producing a set of accounts and forecasts to inform decision-making.
Both roles are dependent on each other, so how do accountants and bookkeepers work together to achieve good client outcomes?
Image: Shutterstock
Flexible boundaries
Ask any financial professional where the boundary lies between bookkeeping and accounting and most will agree that, officially, bookkeeping stops with the trial balance: the financial report of all closing balances (including credit and debit accounts) within the general ledger. In reality, it’s not so clear cut.
According to Katarina Collins FMAAT, financial accountant at Heidelberg Materials UK and chairperson of AAT Swindon Branch, it “depends on company size” and the industry itself. In very small companies, where nothing advisory or particularly complex is needed, bookkeepers may cover the accounts and closing month-end. Equally, an accountant may be called upon to complete VAT returns if a bookkeeper or accounts assistant (as they are sometimes known) is too busy.
Alison Bryan FMAAT, founder of Flourish Accounts, likes to go above and beyond. “Some bookkeepers literally do just basic data entry but others, like me, prefer to be more involved,” she explains. “I produce profit and loss statements, balance sheets, prepare journals for pre-payments and accruals, and prepare wages journals, thereby ironing out any peaks and troughs in financial reporting.”
In the past, Bryan says she has sometimes run into issues with accountants taking exception to her additional efforts. “Some accountants don’t like me doing wages journals,” she says. “But I do them because I’m preparing P&L statements for my clients and not doing [them] would compromise my work.”
In her opinion, it’s within her remit as a good bookkeeper. “Some accountants may not initially like my additional checks, but as a bookkeeper that’s where it finishes: you have a lovely, clean set of books which the accountant can just pick up and work with straight away.”
Caption: Alison Bryan FMAAT
Collaboration and touchpoints
Frequency of collaboration varies hugely depending on the client and the complexity of their business. Freelance bookkeeping assistant Fatma Abdalla says she likes to liaise with her clients’ accountants regularly. “I keep in regular contact with one accountant,” she explains. “They call me if there’s a backlog of bookkeeping jobs for new clients or if they need an extra hand. We also liaise if there’s any discrepancies or if there are question marks over a transaction.”
Bryan also works regularly with one particular accountant, sharing several e-commerce clients who require more hands-on collaboration. “The accountant I work with is absolutely brilliant,” Bryan says. “She recommends me to her contacts and I recommend her to mine. Often, if I have a client who is looking for an accountant and I ask her if she has capacity, she says, ‘If you’re doing the bookkeeping – definitely!’”
The two have built up a good relationship over the years. Bryan updates the accountant on progress every few weeks, sending over profit and loss reports, payables and receivables and wage control accounts, as well as confirming HMRC payments are up to date. She also flags any unusual spikes or discrepancies.
For Collins, collaboration between accountants and bookkeepers is much easier if you are working in the same office; you only have to walk over to the specific department or desk if you have a question. “It’s also about getting to know the person better,” Collins explains. “It’s not just a name in an email. You’re working together for the same employer.”
The work itself is also much more visible. Collins sees first-hand the work that company bookkeepers or accounts assistants put in. “I can see how they work, how they address certain issues and the pressures of their role,” she adds.
Samuel Ojo AATQB, accountancy officer at Barnet Council in London, previously worked at Deloitte LLP as a senior audit and risk advisory associate for three and a half years. In the role, he processed qualitative and quantitative accuracy checks on roughly 2,000 financial statements from different industries and sectors. These had often been put together by a bookkeeper and accountant liaising and collaborating. “Both roles definitely need each other,” he says. “Without the recording and organising of financial data by bookkeepers or bookkeeping automation software, there would not be any financial data for the accountant to interpret.”
Caption: Samuel Ojo and Fatma Abdalla
Mutual respect
Things are changing, but bookkeepers have sometimes been undervalued in the past. The key to maintaining a good working relationship is about appreciating the value both roles bring.
“There is an element of being underestimated sometimes and also expectations vary when it comes to processing and posting of transactions and journals,” Abdalla admits. “I remember during training I asked how many transactions bookkeepers would typically do in a day. One accountant said they would expect us to process 500, but another said 500 a week!”
As Collins points out, accountants need to rely on bookkeepers. “For me, it’s never a case of ‘just’ a bookkeeper,” she says. “I value the skills people bring. Working as a team, I never look up or down. We have a horizontal structure here.”
In Bryan’s experience, she is sometimes asked by a client to refer to herself in emails as the ‘accounts department’ rather than a bookkeeper, but she always refuses. “I’m very proud of being a good bookkeeper but I don’t want people to assume I can give tax advice – that’s the accountant’s remit!”
Katarina Collins FMAAT
Takeaways
So what are the key things to take from this? “Collaboration,” says Collins. “Work flow is much easier if you collaborate. If you’re an accountant, it saves you time; if you’re a bookkeeper, it makes you feel fulfilled because you can see your work is having an impact.”
As far as Bryan is concerned, it’s about making the job as easy as possible for accountants because therein lies the job satisfaction. “When I hand over a set of books to an accountant, they are perfect,” she says. “I have applied all the controls I feel they would expect me to do, completed the journals and I’ve analysed everything. There’s a lot of pride in it for me.”
EXPERTS' VIEWS ON...
What do accountants and bookkeepers need from each other?
“We are two sides of the same coin. The accountant needs the bookkeeper to look after the client's books so the accountant will get quality books and records. Bookkeepers can also be a good source of lead generation – some businesses will hire the bookkeeper before deciding on an accountant.”
Ben Rose MAAT, partner, M Seitler & Co
“Acceptance that we are all part of the same ecosystem and all have the same end goal in mind: to help clients get financial understanding which leads to them achieving life goals. When accountants and bookkeepers work properly together, they can be a powerful force which help businesses thrive and grow.”
Stephen Leonard, FCCA ACA MAAT, partner, J L Winder & Co
“We need to share software knowledge – app advisory in particular. With more than 1,200 apps that plug into Xero, it’s essential we are sharing experience. It’s also useful to share insights for outsourcing/offshoring purposes.”
Emily Rutterford FMAAT, digital solutions manager, Knights Lowe
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