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What is the difference between accountancy and bookkeeping?

The line that divides accountancy and bookkeeping is very grey but this is mainly due to the occupants of these industries rather than the industries themselves. When you have a large number of accountants offering bookkeeping services and just as many bookkeepers offering to do your year end accounts, of course things are going to get confusing.

So what is the difference?

I'm sure you are aware of the saying "look after the pennies and the pounds will look after themselves". Well the bookkeeper looks after the pennies and as the pounds aren't nearly as independent as the saying suggests, the accountant looks after them.

If you put your Dental Practice under a microscope and zoomed in, you will see that it is made up of thousands of small financial transactions. Whether this is a patient paying for a toothbrush or a member of staff buying a pint of milk; money is moving around all of the time. The bookkeeper's job is to capture these transactions. They have to record when each penny came into your Dental Practice and by what means, and chart its movement through the Practice, dividing and multiplying, and eventually through to how it left.

Move away from the microscope and now, instead of these thousands of small financial transactions, you'll see your Dental Practice. You'll see your staff, your business, your goals. This is where you will find your accountant. Their job is to focus on the big picture, to take a step back and look at trends and plans. Your accountant will help you to grow your Dental Practice with broad brush strokes; they are not interested in the pennies.

But what if my accountant has offered to do my bookkeeping?

I often question how someone can excel at both roles, so I refer to a bookkeeper doing your accounts and tax returns as well. Zooming in is a very different skill to stepping back. I would question whether someone who undertakes both takes can zoom in enough or step back far enough.

You wouldn't want to have someone missing out some of the pennies because the pounds will then be wrong. Equally, focusing too much on the pennies can mean that the pounds are forgotten.

I'm not saying that there are not people who can undertake both roles to a high standard, but make sure that whoever you choose to outsource to understands the importance of both.



 

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