A bookkeeper and accountant perform different but complementary roles within a business. The exact support you need depends on the services already provided by your accountant, but having both is usually a practical division of work rather than unnecessary duplication.
A bookkeeper normally maintains the financial records throughout the year. An accountant typically uses those records to prepare annual accounts, tax returns, year-end adjustments and specialist advice. Having an accountant does not automatically mean that invoices, bank transactions, VAT records and payroll are being maintained each month.
The most effective arrangement gives each professional a clearly defined role. The bookkeeper keeps the records current and reconciled, while the accountant concentrates on formal accounts, taxation and advice requiring their particular expertise.
Bookkeeper and Accountant: What Is the Difference?
Bookkeeping is the regular process of recording and organising the financial activity of a business.
This can include entering supplier bills, matching customer receipts, reconciling bank and credit-card accounts, maintaining VAT records and recording payroll transactions.
Accountancy generally involves using those records to prepare formal financial statements, Corporation Tax returns, Self Assessment returns and year-end adjustments.
An accountant may also advise on taxation, business structure, remuneration and significant financial decisions. The exact division depends on the engagement agreed with each provider.
What a Bookkeeper Normally Does
A bookkeeper maintains the records throughout the year rather than waiting until the financial period has ended.
The monthly work can include processing bank transactions, entering supplier invoices, matching customer payments and reconciling every agreed financial account.
A bookkeeper can also maintain customer and supplier balances, collect supporting documents and identify missing or duplicated transactions while the information remains recent.
Depending on the agreed service, the bookkeeper may also prepare VAT Returns, process payroll and produce regular profit and loss and balance-sheet reports.
What an Accountant Normally Does
An accountant commonly prepares statutory accounts and tax returns after the underlying bookkeeping period has ended.
They may review the trial balance, calculate depreciation, post accruals and prepayments and prepare the company’s Corporation Tax computation.
The accountant may also provide specialist advice on business structure, tax planning, director remuneration and significant transactions.
This work normally depends on the bookkeeping records being complete and reliable. Where the accounts are not ready, reconstruction and correction may be required before the accountant can begin the main accounts and tax work.
Does Having an Accountant Include Bookkeeping?
Some accountancy practices provide a complete service covering bookkeeping, VAT, payroll, annual accounts and tax returns.
Other accountants provide annual accounts and taxation services only. In that situation, the business owner or a separate bookkeeper remains responsible for maintaining the records during the year.
The accountant’s engagement letter should explain exactly which services are included.
Do not assume bookkeeping is being completed simply because the accountant can access the accounting software or asks for records at year end.
Questions to Ask Your Accountant
Ask whether the accountant processes transactions throughout the year or reviews the records only after the financial period has ended.
Confirm whether bank reconciliation, customer invoices, supplier bills, VAT Returns and payroll are included within the fee.
Ask how often the accounts are reviewed and whether monthly or quarterly financial reports are supplied.
It is also important to establish who is responsible for each filing and who monitors the related deadlines.
Why Current Bookkeeping Helps Your Accountant
Reliable monthly bookkeeping gives the accountant a much cleaner starting point.
Bank accounts should already reconcile, customer and supplier balances should be credible and VAT and payroll liabilities should be capable of explanation.
This allows the accountant to focus on formal accounts, taxation and advice instead of spending substantial time reconstructing ordinary transactions.
The process can also reduce repeated questions because invoices, statements and supporting schedules are already attached or organised within the accounting system.
What Happens When the Bookkeeping Is Incomplete?
An accountant receiving incomplete records may need to identify missing bank transactions, correct duplicated costs and investigate old balance-sheet figures before preparing the accounts.
Personal spending may need to be removed from business expenses, while genuine business costs paid personally by an owner or director may need to be added.
Supplier bills may appear unpaid even though the corresponding payments have been recorded. Customer receipts may have been entered as additional income instead of being matched with invoices.
This correction work can delay the annual accounts and may be charged separately from the original accountancy fee.
Bookkeeping Costs Compared With Accountancy Costs
Routine transaction processing is generally handled most efficiently through a dedicated bookkeeping process.
Where an accountant must complete substantial bookkeeping reconstruction at year end, the business may be paying accountancy rates for work that could have been maintained more economically throughout the year.
This does not mean accountants should not provide bookkeeping. Many accountancy practices deliver effective combined services.
The important point is to compare the complete scope and total cost rather than assuming one annual fee includes every financial task.
Do You Need Both a Bookkeeper and Accountant?
Many growing businesses benefit from using a bookkeeper and accountant together.
The bookkeeper maintains current records and produces the information needed to understand the business during the year.
The accountant uses those records for formal accounts, tax returns, year-end adjustments and specialist advice.
This division avoids duplication where responsibilities are agreed clearly and allows each professional to concentrate on the work best suited to their role.
When One Provider May Be Enough
One provider may be sufficient where the accountancy practice already includes complete monthly bookkeeping within its service.
The practice should process the agreed transactions, reconcile the financial accounts, manage the relevant VAT or payroll work and provide suitable reports.
The business owner should understand who performs the work, how often it is completed and what information must be supplied.
A sole trader with very few straightforward transactions may also maintain the bookkeeping personally and use an accountant only for annual work, provided the records remain complete and reliable.
When a Separate Bookkeeper Becomes Useful
A separate bookkeeper may be useful where the accountant does not provide monthly bookkeeping or where the business needs more frequent processing and reporting.
Other warning signs include recurring backlogs, stressful VAT deadlines and an annual accounts process dominated by bookkeeping corrections.
The business may also have added payroll, several bank accounts, credit cards or payment platforms that make the owner-managed process increasingly difficult.
Our guide to outgrowing DIY bookkeeping explains five practical signs that professional support may now be appropriate.
How a Bookkeeper and Accountant Work Together
A well-organised workflow begins with the bookkeeper maintaining transactions and reconciliations throughout the year.
The bookkeeper raises queries with the business, obtains supporting documents and reviews relevant balance-sheet accounts regularly.
At year end, the accountant receives the trial balance, financial reports and supporting schedules.
The accountant can then post the required adjustments and prepare the statutory accounts and tax returns. Final journals can be entered into the bookkeeping software so its closing balances agree with the completed accounts.
Who Should Prepare VAT Returns?
A bookkeeper may prepare and submit VAT Returns where this is included in the agreed service and suitable authority is in place.
The work should include maintaining digital records, reviewing VAT coding, reconciling relevant accounts and obtaining approval before filing.
An accountant may retain responsibility where the VAT position is complex or forms part of a wider tax engagement.
The business should confirm who prepares the return, who approves it, who submits it and who arranges payment to HMRC.
Our VAT returns service explains how transaction review, reconciliation and Making Tax Digital filing can be included within an agreed arrangement.
Who Should Manage Payroll?
Payroll can be handled by a bookkeeper, accountant, payroll bureau or appropriately trained employee.
The selected provider may maintain employee records, calculate wages and deductions, submit Real Time Information and issue payslips.
The bookkeeping records should then reflect gross wages, employer costs, employee deductions, net pay and amounts owed to HMRC and pension providers.
The business remains responsible for providing accurate starter, leaver, absence and pay information before the agreed deadlines.
Our payroll services can support PAYE calculations, RTI submissions and payroll bookkeeping where these tasks form part of the engagement.
Who Should Produce Monthly Reports?
A bookkeeper can produce regular profit and loss, balance-sheet, aged receivables and aged payables reports after the records have been completed and reconciled.
An accountant or fractional finance professional may provide more detailed interpretation, forecasts, budgets and strategic analysis.
The phrase management accounts can describe several levels of work, so the expected reports and commentary should be agreed clearly.
A report generated from incomplete or unreconciled data should not be treated as dependable management information.
Who Is Responsible for Annual Accounts?
For a limited company, annual statutory accounts are commonly prepared by the accountant.
The bookkeeper’s role is generally to ensure the underlying ledger is complete, reconciled and supported.
The accountant may then make formal year-end adjustments and prepare the financial statements and Corporation Tax return.
Our guide to Xero year-end explains how bank reconciliations, supporting schedules and accountant adjustments prepare the records for annual accounts.
Who Should Provide Tax Advice?
A professional bookkeeper can maintain records and explain ordinary bookkeeping procedures, but should not claim to provide specialist tax advice without the appropriate expertise and engagement.
Questions involving tax planning, restructuring, capital gains, inheritance tax, complex VAT or director remuneration should normally be referred to a suitably qualified accountant or tax specialist.
A good bookkeeper recognises the limits of their role and helps ensure that the accountant receives the information needed to advise properly.
The business should not assume that every person who works with accounting software is qualified to advise on every tax issue.
Can Your Accountant Recommend a Bookkeeper?
Many accountants maintain relationships with bookkeepers or outsourced providers whose work they know and trust.
A recommendation can be useful because the accountant already understands the standard of records needed for the annual accounts.
The business should still confirm the bookkeeping scope, monthly fee, communication process and who owns the client relationship.
Some accountants prefer the bookkeeper to communicate directly with them, while others want communication routed through the business owner.
Can You Choose Your Own Bookkeeper?
A business can usually appoint a separate bookkeeper while retaining its existing accountant.
The two providers should be introduced and given suitable access to the same cloud accounting records.
The bookkeeper should understand the accountant’s reasonable requirements for year-end schedules, account categories and supporting records.
The accountant should also know which recurring responsibilities the bookkeeper has agreed to complete.
How Cloud Accounting Supports Collaboration
Cloud accounting systems such as Xero and QuickBooks allow the owner, bookkeeper and accountant to work from the same current records.
This reduces the need to exchange multiple spreadsheet versions and lowers the risk of one provider working from outdated information.
Each person should have an individual user account with permissions suitable for their role.
The business owner should retain appropriate administrative control and remove access when a provider or employee no longer requires it.
Avoiding Duplication Between Providers
The engagement scopes should be compared before appointing both professionals.
There is little value in paying two providers to reconcile the same bank account or prepare the same VAT Return independently.
Recurring responsibilities should instead be allocated clearly. The bookkeeper might maintain the monthly records and prepare the VAT information, while the accountant handles annual accounts and specialist tax work.
Where the accountant reviews the bookkeeper’s work, the review process should be proportionate and understood by the client.
Avoiding Gaps Between Providers
Duplication is inefficient, but gaps can be more serious.
The business should not assume that the bookkeeper is filing a tax return while the bookkeeper assumes the accountant is responsible.
VAT, payroll, pensions, annual accounts and tax returns should each have a named responsible person and a clear deadline.
Engagement letters and regular communication should make this division unambiguous.
What the Bookkeeper Should Send to the Accountant
At year end, the bookkeeper can provide a completed trial balance and the main financial reports.
Supporting information may include bank reconciliation reports, aged receivables, aged payables, VAT reports, payroll summaries, fixed-asset information and loan schedules.
Material unresolved queries should be identified clearly rather than hidden through unsupported journals.
The accountant may also request invoices, contracts, stock records and information about significant events occurring after the year end.
What the Accountant Should Return
After completing the annual accounts, the accountant should provide or post the agreed year-end adjustments.
These may include depreciation, accruals, prepayments, Corporation Tax and other formal accounting entries.
The final trial balance in the bookkeeping software should agree with the completed statutory accounts.
The bookkeeper can then apply appropriate lock dates and begin the next year with reliable opening balances.
Can Better Bookkeeping Reduce Accountancy Costs?
Clean bookkeeping can reduce the reconstruction and correction work required at year end.
Whether this reduces the accountancy fee depends on the accountant’s pricing structure, the previous condition of the records and the services included.
The saving should not be treated as guaranteed. Some accountants charge a fixed annual fee that will not change immediately.
Even where the fee remains the same, better records may allow the accountant to spend more time on accounts, tax and useful advice rather than basic correction work.
Can a Bookkeeper Improve Business Decisions?
Current bookkeeping can provide the owner with more useful financial information during the year.
The business can review recent income, overheads, customer debts, supplier liabilities and tax amounts instead of waiting for annual accounts.
This does not replace budgeting, forecasting or strategic advice, but it gives the accountant or finance adviser better information from which to work.
Reliable bookkeeping is therefore both a compliance foundation and a management tool.
Bookkeeper and Accountant for Sole Traders
A sole trader with a small number of transactions may maintain the bookkeeping personally and use an accountant for Self Assessment and specialist advice.
As the business grows, a bookkeeper can maintain income, expenses, bank reconciliations and VAT records where registration applies.
The accountant can then use those records to prepare the tax return and advise on more complex matters.
The decision should reflect transaction volume, VAT responsibilities, owner time and the quality of the existing records.
Bookkeeper and Accountant for Limited Companies
A limited company normally has more formal record-keeping and reporting requirements than a straightforward sole-trader business.
The bookkeeping should distinguish company transactions from salary, dividends, director loans and personal spending.
The accountant commonly prepares the statutory accounts and Corporation Tax return, while the bookkeeper maintains the ledger throughout the year.
This division can be particularly effective where the company has VAT, payroll, several financial accounts or regular reporting requirements.
Bookkeeper and Accountant for Growing Businesses
Growth increases transaction volume, financial accounts and reporting requirements.
The owner may initially maintain the records personally, but this can become difficult after payroll, VAT and several payment systems are added.
A dedicated bookkeeper provides continuity, while the accountant continues handling annual compliance and advice.
The combined arrangement can scale without requiring the business to employ a complete internal finance team immediately.
White-Label Bookkeeping for Accountants
Some accountancy practices outsource bookkeeping to a specialist provider while continuing to manage the client relationship.
The work may be delivered under the practice’s branding or through a collaborative arrangement.
The scope should confirm communication, access, responsibilities and whether the bookkeeping provider will have direct contact with the client.
Bookkeeping Packages Ltd provides bookkeeping support for accountants that need dependable recurring capacity for client work.
What to Look for in a Bookkeeper
A suitable bookkeeper should explain the monthly process, included accounts, software, document requirements and reporting timetable clearly.
They should understand bank reconciliation, customer and supplier ledgers, VAT records and payroll bookkeeping where those services are offered.
Relevant experience, professional indemnity insurance and secure data-handling procedures are also important considerations.
A bookkeeper should be willing to work constructively with the existing accountant and recognise when specialist advice is required.
What to Look for in an Accountant
The accountant should provide a clear engagement letter identifying the annual accounts, tax returns and advisory work included.
They should explain what information they expect from the bookkeeper and when it is needed.
The business should also understand how tax questions, filing approvals and year-end adjustments will be managed.
Effective communication between the accountant, bookkeeper and client is often more important than whether both services come from the same firm.
How Much Does a Separate Bookkeeper Cost?
The monthly price depends on transaction volume, number of financial accounts, VAT, payroll, payment platforms and reporting requirements.
A straightforward Bookkeeping Packages Ltd engagement may begin from approximately £250 per month, subject to complexity and the final agreed scope.
Historical catch-up and correction work are normally assessed separately from recurring monthly bookkeeping.
Our guide to choosing a bookkeeping package explains the factors that should be considered before appointing a provider.
Can You Change Bookkeeper Without Changing Accountant?
A business can normally change its bookkeeper while retaining the same accountant.
The outgoing and incoming providers should arrange a clear handover of records, software access and outstanding queries.
The latest completed bank reconciliation, VAT period and payroll position should be identified.
The accountant can help confirm whether unresolved issues need to be corrected before the new monthly process begins.
Can You Change Accountant Without Changing Bookkeeper?
A business can also retain its bookkeeper while appointing a new accountant.
The bookkeeper can provide current records and supporting reports to the incoming accountant.
The new accountant may request changes to year-end schedules or reporting, but unnecessary restructuring should be avoided where the existing system works properly.
Software access and professional handover procedures should be arranged appropriately.
A Practical Way to Decide What You Need
Begin by reviewing the accountant’s engagement letter and listing every recurring financial task.
Identify who currently processes transactions, reconciles accounts, maintains VAT, runs payroll and prepares monthly reports.
List annual accounts, tax returns and advisory responsibilities separately.
Any task without a clear owner represents a gap. Any task assigned to two providers may represent unnecessary duplication.
How Bookkeeping Packages Ltd Works With Accountants
Bookkeeping Packages Ltd can maintain the recurring records while the client’s existing accountant continues providing annual accounts, tax returns and specialist advice.
We can work directly with the business, collaboratively with the accountant or through an outsourced arrangement.
The service can include transaction processing, bank reconciliation, VAT records, payroll support and regular reports according to the agreed scope.
Our outsourced bookkeeping service is designed to produce clear, reconciled records that can be handed to the accountant efficiently.
Getting the Right Bookkeeper and Accountant Support
The right bookkeeper and accountant arrangement gives the business current records throughout the year and specialist support when annual accounts and tax returns are prepared.
The first step is to identify which bookkeeping services your accountant already provides.
We can then review the accounting software, financial accounts, VAT, payroll and current condition of the records to determine whether a separate monthly service is required.
Where the books have fallen behind, catch-up and correction work may need to be completed before normal monthly processing begins.
To discuss how a bookkeeper and accountant can work together for your business, review our bookkeeping services, use the Bookkeeping Packages enquiry form or call 0161 531 0087.
About the Author
Stuart Kerr is Managing Director of Bookkeeping Packages Ltd, an outsourced bookkeeping service supporting UK small businesses and accountancy practices. With over 20 years of bookkeeping experience, Stuart specialises in helping businesses maintain reliable financial records and useful management information.
This article is provided for general information only. Stuart Kerr is a professional bookkeeper, not a tax, legal or regulated financial adviser. Nothing in this article constitutes tax, legal or financial advice. The responsibilities of a bookkeeper and accountant depend on the individual engagement, and advice specific to your circumstances should be obtained from an appropriately qualified professional.