What’s the Difference Between Bookkeepers, Accountants & Tax Agents?

The world of finance contains many roles. From auditors to analysts, bankers, and financial officers, there are many different pathways you can take within the industry, depending on your area of expertise and interest. Whether you’re wanting to explore a role in finance, or you’re a small business that may need some financial help, it’s important to understand a few of the key roles within the financial sector. Undoubtedly, the most common roles you’ll encounter are those of bookkeepers, accountants, and tax agents. Sometimes these terms are used interchangeably; however, they are not the same. To give you a stronger understanding of the similarities and differences between these professional services, Shoebox provides a summary of each role. This guide shows you what working as a bookkeeper, accountant, or tax agent may look like and some of the qualifications you’ll need if you’re wanting to break into the industry. So, keep on reading to learn more about these vital services and professional roles.

Accountants

Accountants are typically employed by businesses to assist with preparing financial statements that reflect the business’ performance. They are usually responsible for the collection, recording, analysis, and visualisation of a business’s financial operations. Further, depending on the scale of the business, the accountant may have additional or fewer responsibilities. For example, smaller companies may just require data collection and report generation – for this, companies typically outsource an accountant for help; however, larger companies may hire one in-house to work as a financial adviser or interpreter. For larger companies, accountants may also provide presentations to external stakeholders. To put it in layman’s terms, an accountant is simply someone who interprets financial information to assist with the greater decision making processes within a business.
According to Seek, some of the specific tasks and duties performed by accountants include the following.

• Examining the income and expenditure of the individual or organisation.
• Creating and maintaining budgets
• Preparing financial statements
• Creating accounting policies in consultation with senior stakeholders and in alignment with regulatory requirements
• Preparing reports that articulate business compliance with regulatory requirements.
• Undertaking audits, conducting financial investigations and managing insolvency
• Providing advice about business plans, structures and accounting systems
• Establishing bank accounts, funds and trusts
• Managing cash flow
• Managing investment projects.

To learn more about the role, the Australian Government’s Job Outlook service also proved a great resource for stats relating to the profession. Working as an accountant, you can expect to earn around $70K+, which is the average yearly salary for an accounting position in Australia. To become a certified practising accountant you must have completed a bachelor degree. Either a bachelor of accounting or a bachelor of business majoring in accounting. After this, to become an accountant, you must become a member with one of the three professional bodies that regulate accounting in Australia. These are Chartered Accountants of Australia (ICAA), the Institute of Public Accountants (IPA) and CPA Australia (CPA).

Although you need these qualifications to become an accountant, you do not need them in order to work in an accounting role. As long as you’re accredited by one of the aforementioned bodies, you will be able to use some basic accounting skills like producing financial reports to be analysed externally. Further, if a bachelor’s degree isn’t on the cards for you, you can progress your skills in accounting through courses such as certificate IV in Accounting, or diploma of Accounting – these can help you gain entry into the IPA.

Taking Your Degree Further

Already an accountant and looking to progress your career? Getting a CA or CPA can give you a competitive edge. So, what are these extra qualifications and what can you do with them?

• CA: This stands for chartered accountants. Obtaining this qualification makes you better equipped to handle more complex accounting processes, like auditing and technical tax issues, and progresses you towards working with a Big Four firm.
• CPA: A Certified Practicing Accountant, on the other hand, gains a more varied skill set. This qualification provides additional accounting skills, such as costing, production, marketing and planning which can help you break into a range of alternative industries.

Key Skills as an Accountant

• Critical thinking
• Mathematics
• Reading and comprehension
• Communication
• Computer knowledge
• Interpersonal skills

Bookkeepers

Bookkeepers are responsible for maintaining a business’ accounting records. They assist small businesses with recording financial transactions in account books or computerised accounting software. Bookkeepers can be hired to work within a business internally or can be outsourced. As they deal with the fine details of a business’ ingoing and outgoing transactions, they become quite familiar with their business clients.
According to Job Outlook, some of the key roles and responsibilities of a bookkeeper include the following.

• Keeping financial records, and maintaining and balancing accounts using manual and computerised systems
• Monitoring cash flow and lines of credit
• Preparing and producing financial statements, budget and expenditure reports and analyses using account books, ledgers and accounting software packages
• Preparing invoices, purchase orders and bank deposits
• Reconciling accounts against monthly bank statements
• Verifying recorded transactions and reporting irregularities to management
• May be required to prepare forms reporting business tax entitlements and obligations such as the number of goods and services tax paid and collected.

On average, bookkeepers in Australia earn $60K+ a year. Bookkeeping is a role that requires a slightly less extensive qualification process than accounting. To become a bookkeeper, you must hold a certificate IV in Bookkeeping or Accounting. Also, to perform tax preparation processes, you must also be registered as a BAS agent with the Tax Practitioners Board (TPB).

Key Skills as a Bookkeeper

• Attention to detail
• Critical thinking
• Mathematics
• Reading and comprehension
• Communication
• Computer knowledge
• Interpersonal and relationship-building skills
• Organisational skills

Tax Agents

Finally, we have tax agents. Tax agents are a specialist type of accountant – namely, they specialise in taxation accounting. To do this, they have studied tax and law to be registered by the TPB. Having this registration means that they can provide tax services to the public – as long as they renew their licence every three years.
Some of the roles and responsibilities involved as a registered tax agent involve the following, as outlined by TPB.

• Ascertaining (that is, working out) or advising about liabilities, obligations or entitlements of entities (that is your clients) under a taxation law
• Representing entities in their dealings with the Commissioner of Taxation (Commissioner) in relation to a taxation law
• Where it is reasonable to expect the entity will rely on the service to satisfy liabilities or obligations, claiming entitlements under a taxation law.

In Australia, the average Taxation accountant earns $70K+ a year in salary. As taxation is a more specialised role within accounting, it requires more qualifications, knowledge, and skill.For example, it requires constant knowledge of updated taxation legislation – hence the requirement for licence renewal. The skills required to be a tax agent are more or less similar to those of accountants and bookkeepers.

In Summary

Accounting is mainly concerned with interpreting and summarising these business findings into relevant information. Financial statements can be constructed by accountants for directors or owners to make relevant business decisions. The skillset required to perform this role is of a high level. Accountants typically use bookkeeping data to conduct their analysis of the data.

Bookkeeping mainly requires recording, identifying, and measuring business transactions. Decisions cannot always be made based on Bookkeeping outcomes – accountants may be required to step in to assist with financial planning.

Taxation agents specifically provide tax services. This is a specialist accounting area and requires an even more specific skill set as a branch of accounting. Tax agents must have an up-to-date understanding of tax and legislation as it changes to support businesses.

If you’ve got a flair for mathematics and good attention to detail and are curious about entering one of the aforementioned professions, then go for it! Working within the financial sector is challenging, rewarding, and provides opportunities for you to grow – especially if you’re keen to upskill along your career path. It’s also an incredible stable position, which is an increasingly rare quality in jobs.

For small businesses requiring any of the services mentioned, Shoebox Books and Tax provides all three professional services under the same umbrella. Shoebox provides you with experienced bookkeepers, accountants, and tax agents from all around Australia to help your business with the specific financial services it needs. Get in touch with Shoebox today to see how we can help you.