If you are a business owner who is not working deep in detail, but rather managing the financial function of your business, you might not be aware of the difference between a bookkeeper, accountant and payroll professional. With each role seemingly working towards the same goal of financial reconciliation, these three professionals are responsible for vastly different tasks. Whether you employ one, two or all three onsite or are considering outsourcing payroll, here are the core differences and how these roles may play a part in the success of your business.
Before comparing a bookkeeper, accountant and payroll professional, let us first define what these roles mean with a very brief summary.
Bookkeeper: focusing on the financial transitions and financial administration of the business.
Accountant: assesses financial performance, and provides advice based on financial figures.
Payroll Professional: tasked with paying employees and maintaining the financial records of the employee’s wages, salary, withheld tax, deductions and entitlements.
A bookkeeper is a great all-rounder for businesses as they are tasked with collecting and collating all the financial records so that they can be accounted for and balanced at a nominated period (typically the end of the month). It is not uncommon for a bookkeeper to work with every department in a business to ensure that all expenses are captured, and data entry will be a core part of their day-to-day responsibilities. While a bookkeeper can be a support to an accountant and a payroll professional, these are not typical parts of the job.
Core differences of a bookkeeper
Whereas an accountant and a payroll professional work in the past, present and future, a bookkeeper only tracks things that have been spent already. They track daily financial transactions and have access to these expenditures through data entry and financial records. A bookkeeper will continually track these figures and invoices, but will not have the responsibility to keep these expenditures to a capped amount, manage who spends or analyse these figures beyond simply tracking them.
Generally speaking, the role of a bookkeeper will not impact how an accountant or payroll professional completes their job. This is a key difference between a bookkeeper, accountant and payroll professional.
Sometimes an accountant will be a generalised term for a professional who works in the financial environment, although they conduct a specific role. The responsibility of an accountant in a business setting is to measure, process and communicate the position of the business to key stakeholders. An accountant will also have a competent knowledge of the financial landscape, ensuring that investors, regulators and general management are satisfied with how the business is performing.
Core differences of an accountant
The accountant within a business will work closely with management to identify issues in the business and highlight successes, whereas the payroll professional and bookkeeper will not have that intimate knowledge of how the business is performing. While a bookkeeper and payroll professional can be siloed, the accountant will need to be across both of these functions to accurately understand the full picture of the business’s financial position.
Payroll professional’s responsibilities
The responsibilities of a payroll professional are significant, as they manage the salaries, wages and tax compliances of the business. Ensuring that employees are paid on time and accurately is not only good business, but it is a legal requirement and one that businesses can find themselves in hot water if they are not compliant. In recent years, finance payroll software has been introduced to better manage employee data, which has also resulted in a more streamlined payroll process, and made more streamlined still when engaging an outsourced payroll provider to manage these responsibilities.
Core differences of a payroll provider
One of the core differences between a payroll provider and an accountant or bookkeeper is that they liaise with a large number of stakeholders (management, finance departments, employees). They also work closely with the ATO through online payroll capacity, and this means keeping an eye on changing legislation, evolving reporting duties and award rate amendments. A payroll professional must structure their payroll to include casual employees, part-time employees, full-time employees and all the entitlements that come with those diverse roles.
Unlike an accountant or bookkeeper, a payroll professional manages sensitive data including employee details and employee salaries. It is also quite common for a large and small business payroll professional to work with integrated systems like time-tracking software and rostering software.
Core difference between a bookkeeper, accountant and payroll professional
Every position is related to business and finance, but also varies greatly in general responsibilities. So what is the primary difference between a bookkeeper, accountant and payroll professional? Bookkeepers focus on organisation of financial data, while accountants focus on interpreting that information for stakeholders. By comparison, payroll professionals manage the payroll and entitlements for businesses and their employees.
i3Group work with Australian businesses in all sectors, implementing payroll structures that will support existing financial environments. If you would like to book a demo to see what a professional payroll service could look like in your business, i3Groups payroll professionals are ready to walk you through that change. Contact 1300 927 367
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