🙋If you’ve ever found yourself staring at your business finances, wondering whether you need a bookkeeper, an accountant, or both, you’re not alone. Many small business owners and sole traders aren’t quite sure where one role ends and the other begins. After all, they both deal with numbers, taxes, and financial reports – so what’s the difference?
Let’s break it down in a simple, no-jargon way to help you figure out who you need, when, and why.
What Does a Bookkeeper Do?
Think of a bookkeeper as the financial organiser of your business. Their job is to keep your records accurate, up to date, and ready for whenever you need them. Here’s what that looks like in practice:
- Recording Transactions – Every time money moves in or out of your business, it gets logged correctly. This includes sales, expenses, invoices, and receipts.
- Bank Reconciliation – Matching up your bank transactions with your records to make sure nothing is missing or duplicated.
- Managing Invoices and Payments – Keeping track of what you’re owed and what you need to pay, making sure everything runs smoothly.
- Tracking Expenses – Categorising business costs so you can see where your money is going (and what you can claim back!).
- Providing Financial Reports – Summarising your income and expenses in clear reports, so you always know how your business is doing.
- Filing Tax Returns – Many bookkeepers are qualified to submit tax returns for sole traders and small businesses, ensuring compliance with HMRC and helping you avoid penalties.
With Making Tax Digital (MTD) becoming mandatory, having a bookkeeper who understands digital record-keeping and tax submissions will be more important than ever.
What Does an Accountant Do?
While bookkeepers handle the day-to-day financial records, accountants step in for the bigger picture. They take that well-organised data and use it to provide insights, financial planning, and legal compliance. Here’s what accountants typically do:
- Financial Forecasting – Helping you plan for the future by analysing trends and predicting cash flow.
- Providing Business Advice – Guiding you on growth, investments, and financial strategies.
- Ensuring Compliance – Making sure you’re following HMRC rules and regulations.
- Year-End Accounts and Reports – Producing official documents required by law if you’re a limited company.
- Complex Tax Planning – Advising on ways to minimise tax liabilities and optimise financial strategy.
In short, accountants focus on analysis, planning, and compliance rather than the daily financial tasks.
Do You Need Both?
The answer depends on your business and where you are on your journey. Here’s a general guide:
You Need a Bookkeeper If…
✅ You struggle to keep up with your financial records and feel overwhelmed by receipts and invoices.
✅ You want to avoid costly mistakes that could lead to HMRC penalties.
✅ You’re spending too much time on finances instead of running your business.
✅ You need accurate, up-to-date records to track how well your business is doing.
✅ You want someone to handle your tax returns and ensure you’re compliant with Making Tax Digital.
You Need an Accountant If…
✅ You need help making financial decisions or planning for the future.
✅ You run a limited company and need statutory accounts filed.
✅ You want someone to explain complex financial matters in a way that makes sense.
✅ You need strategic tax planning beyond basic tax returns.
You Need Both If…
✅ You want a complete financial support system that keeps your business running smoothly and legally.
✅ You’re growing your business and need help managing finances, tax, and strategy.
✅ You’d rather focus on what you love and leave the financial side to professionals.
Can One Person Do Both?
In some cases, yes – some accountants also offer bookkeeping services. However, not all bookkeepers provide accounting, as it requires different qualifications and expertise. Many small businesses find that working with both a bookkeeper and an accountant gives them the best of both worlds.
Final Thoughts
At the end of the day, the choice between a bookkeeper, an accountant, or both comes down to your needs and the level of support you want. If you’re just starting out, a bookkeeper can help you stay organised and stress-free, while also handling tax returns and keeping you compliant with Making Tax Digital. As you grow, an accountant can provide the financial insights and strategy needed to take your business to the next level.
Whatever you choose, the most important thing is having the right financial systems in place so your business runs smoothly. And if you’re still not sure what you need, why not have a chat with a bookkeeper (like me!) to see how we can help?
Do you currently work with a bookkeeper or accountant, or are you managing your finances yourself? Let me know in the comments – I’d love to hear your experiences!