Bookkeeping is a legal requirement for all businesses of any size to carry out, and it refers to the recording of the financial transactions of a business, whether a sole trader, a partnership, or a limited company. 

 

A bookkeeper will record all transactions and keep copies of all invoices, receipts and evidences of these incomings and outgoings. If a business has employees, the bookkeeper might also be responsible for calculating the salary due to each employee, as well as the National Insurance Contributions (NICs) and other tax due. 

An accountant has expert knowledge of the ever-changing rules surrounding tax and accounting – they are essentially lawyers who specialise in tax law. Filing your returns, doing the payroll and paying your taxes is fine as a basic financial function – after all, you are bound by law to do so! – but a business needs to consider more than just the basic ins and outs of its finances, which is all a bookkeeper can do. Hiring an accountant will almost always be of financial benefit in the long run – when you choose the right one to work with, of course. 

 

A business owner doing their own bookkeeping – or hiring somebody else doing it for them – needs to be completely certain that they are not making costly or illegal errors. Accountants and bookkeepers have years of experience and knowledge regarding the types of expenses that can be claimed, what can't, and can essentially help you stay on the right side of the law. Of course, an accountant can also help you be as tax efficient as possible, which is not a service bookkeepers typically offer. 

 

At Effective Accounting we provide a full bookkeeping and accountancy services to give a full end-to-end service. This means that all our clients benefit from the expertise of both bookkeeper and accountant to help them manage their accounts and tax affairs.